Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Royal Assent

Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

Development Board for Rural Wales Act 1991
Caravans (Standard Community Charge and Rating) Act 1991
Statutory Sick Pay Act 1991

PRIVATE BUSINESS

SMITH KLINE & FRENCH LABORATORIES, AUSTRALIA, AND MENLEY & JAMES, AUSTRALIA BILL [Lords]

Read the Third time, and passed.

Oral Answers to Questions — EDUCATION AND SCIENCE

Truancy

Mr. Pawsey: To ask the Secretary of State for Education and Science what action is being taken to reduce rates of truancy.

The Parliamentary Under-Secretary of State for Education and Science (Mr. Michael Fallon): My right hon. and learned Friend is providing grant of £ 6·5 million for projects in 31 local education authorities to improve attendance in designated schools. We shall shortly be issuing to local authorities and others guidance on education supervision orders which the Children Act 1989 will provide from October.
We are considering whether further measures are necessary.

Mr. Pawsey: I thank my hon. Friend for that detailed and helpful response. Does he think that local education authorities are playing their full part in ensuring that children attend school and, when they reach school, stay there? Will my hon. Friend consider publishing a table by local education authorities to show truancy levels?

Mr. Fallon: I am grateful to my hon. Friend. Parents are responsible for ensuring that their children turn up at school. Local authorities have the power to prosecute, but not all of them appear to do so, although they should. I shall consider publishing a table. We need better information and parents and the public are supposed to know which local authorities are performing properly.

Miss Lestor: Is the Minister aware that questions that I have tabled asking for a national assessment on truancy have not been answered, on the basis that the Government do not collect those statistics nationally, so there is no clear picture of the problem? Does he agree that one of the biggest problems is that many youngsters who play truant—it is estimated that there are about 100,000 at any one time—work illegally, often because of unemployment in the area or for other reasons? That problem needs urgent attention.

Mr. Fallon: On the first part of the hon. Lady's question, we are considering whether we can collect and publish the figures on a national basis. At present, they are not collected or published uniformly by the local education authorities. On the second part of the hon. Lady's question, she is right that there is a link between truancy and criminality. It is, therefore, important to ensure that more pupils turn up at school.

Mrs. Ann Winterton: Is my hon. Friend aware that some parents do not know that their children are playing truant from school? Will he ensure that everything possible is done by schools and others to ensure that parents are informed immediately absences are noted and are encouraged to do everything they can to take responsibility for their children's future attendance in education?

Mr. Fallon: My hon. Friend makes a good case for further guidance, which should include reminding parents of their responsibilities and ensuring that the school informs them as quickly as possible.

Mr. Skinner: Will the Minister confirm that he has no evidence of the pairing system operating in schools in Britain? Is he aware that if there were a pairing system called "organised truancy" and the rates were as bad as they are for voting in the House of Commons, the attendance rate in schools would be less than 50 per cent? The truth is that there is not a school in Britain with less than 80 per cent. attendance.

Mr. Fallon: The hon. Gentleman makes an important point about the definition of truancy. We shall have to consider whether the regulations need to be clarified to distinguish between absence that is justified—the child may be sick or have a good reason for being absent—and the sort of unauthorised absence that the Patronage Secretary might recognise.

Grant-maintained Schools

Mr. Norris: To ask the Secretary of State for Education and Science how many schools have achieved grant-maintained status.

Mr. Anthony Coombs: To ask the Secretary of State for Education and Science how many schools have become grant maintained since the passing of the Education Reform Act.

The Secretary of State for Education and Science (Mr. Kenneth Clarke): Fifty schools are now operating as grant-maintained schools compared with 20 this time last year. My predecessor and I have approved a further 10 applications.

Mr. Norris: I thank my right hon. and learned Friend for that reply. Does he agree that grant-maintained status is ideal for mature and well-managed schools that want and deserve greater control over their affairs and that local management of schools has proved to countless head teachers just how popular the concept is? Is not it extraordinary that the Opposition apparently want to deny that greater freedom of choice to schools, parents and pupils?

Mr. Clarke: I agree with my hon. Friend. Mr. Simpson, the headmaster of Wilson's school, Sutton, has said that grant-maintained status is an unqualified success and he is happy with it. He and many other heads are finding that being in proper control of their schools is an exciting prospect. Grant-maintained status is popular with staff and parents and many of those schools are heavily over-subscribed with applicants. Following the success of the first grant-maintained schools, many more will apply for that status. I share my hon. Friend's belief that it is extraordinary that the Labour party should still be organising such persistent campaigns in defence of nothing more than local authority bureaucracy.

Mr. Anthony Coombs: I welcome the expansion in grant-maintained schools, which is due to their popularity with parents, but will my right hon. and learned Friend reflect on the fact that in opposing grant-maintained schools and almost every other choice in education, including the independent sector, city technology colleges and grammar schools, the Labour party is really telling parents, "You will get what we deign to give you and, effectively, there will be no choice whatever"?

Mr. Clarke: I agree with my hon. Friend. The Labour party has consistently opposed giving more autonomy and independence to the management of individual schools, thereby opposing schools becoming more responsive to parents and the local community. Its attitude towards the assisted places scheme and CTCs shows that envy overcomes all appreciation of academic excellence in our schools.

Mr. O'Hara: Will the Secretary of State confirm that the countless numbers of head teachers who have been "delighted" by grant-maintained status is about 50 out of approximately 6,500 eligible in the first year of the scheme? Will he further confirm that it is easy to be delighted by grant-maintained status when one is bribed by the Government to the tune of three, four or in some cases even 10 times the capital expenditure allocation for state schools?

Mr. Clarke: I am delighted to tell the hon. Gentleman that another 54 ballots are pending and applications are increasing rapidly. It is indicative of the hon. Gentleman's extraordinary bitterness towards the concept that he uses the term bribery for perfectly sensible funding arrangements. It is extraordinary that he and many of his political friends in local authorities continue to show such bitterness towards local control of schools.

Mr. Simon Hughes: The Secretary of State must be honest about the matter. How can he answer the complaints of parents in local education authority achools who, in the Prime Minister's new classless Britain with education at the top of the agenda, know that their schools receive only one third or one quarter of the capital

resources of grant-maintained schools? Why do their schools have leaking roofs, unmaintained buildings and a lack of capital while grant-maintained schools get all the money? That is not a classless, equal, fair education system.

Mr. Clarke: I am always honest in my replies here and elsewhere. I seek to maintain my George Washington record in these matters. I accept that often when we consider applications for grant-maintained status we find that the schools have been neglected for many years and we pay particlar attention to the capital applications from those schools. The proportion that results is not on the scale that the hon. Gentleman suggests, but when we set up a new, autonomous, grant-maintained school, we should put right the neglect of years and put capital into that school. All that is capital investment in state schools. The capital allocations to local authorities for their maintained schools have been dramatically increased as a result of my predecessor's settlement. There is nothing unfair in what we propose.

Dame Elaine Kellett-Bowman: Does my right hon. and learned Friend accept that the two out of 50 schools in my constituency which have gone for grant-maintained status are delighted that they have done so? They have been able to appoint new staff and broaden their subject areas and they have got away from the dead hand of the bureaucratic Lancashire county council. They can now choose the courses that they want rather than have them foisted on them by bureaucrats.

Mr. Clarke: I am grateful to my hon. Friend. She adds to the growing number of examples of schools where the transition has been a great success. It has given a boost in morale to teachers, parents and everybody associated with such schools and that has led to a big increase in applications from all over the country.

Mr. Straw: Is not one reason why, after 12 years of Conservative rule, the British people have less faith in their education system than the people of any other country in Europe have in theirs, the intense and corrupt double standard that the Government operate on the education of the nation's children? Despite what the Secretary of State said, there is bribery to encourage schools to opt out. That is in complete breach of categorical undertakings given by the Secretary of State's predecessors that there would be financial neutrality between the funding of LEAs and grant-maintained schools. As long as this intense discrimination continues, is not it clear that the Prime Minister's conversion to the importance of education is a cynical and hollow sham?

Mr. Clarke: I share fully the public's concern about educational standards and it is important that we improve them. I believe that the public's concern is based largely on their reaction to 20 years of the trendy, left-wing, misguided education policies with which the Labour party and its supporters have been closely associated and still are. We are now introducing a national, broad-based curriculum with a proper system of testing and reporting to parents and introducing local management for schools, which will give real authority to teachers and governors, thereby allowing them to put things right in their schools. The hon. Gentleman cheapens the debate by using words like bribery to describe the financial arrangements. He


does that to disguise the fact that he has nothing to offer to reverse some of the more unfortunate factors of the past 20 years.

Education Policy

Mr. Adley: To ask the Secretary of State for Education and Science what recent discussions he has had with the teaching unions about education policy.

The Minister of States Department of Education and Science (Mr. Tim Eggar): My right hon. and learned Friend has frequent meetings with the teaching unions on a wide range of educational policy matters.

Mr. Adley: The Secretary of State referred to the trendy left-wing policies emanating from the Labour party. When my hon. Friend contemplates the advice that his Department receives from the teacher unions about education policy and the weight and merit that he should attach to it, will he bear in mind the fact that 25 per cent. of those who are individual members of the Labour party are also members of teaching unions? Is not this an unhealthy relationship?

Mr. Eggar: I am very interested in the information that my hon. Friend has made available. It goes a long way towards explaining the policies of the Labour party. I have some understanding of the considerable difficulties that the Opposition have, as I, too, am subject to conflicting strands of advice from different teacher unions. The Labour party must find it difficult to reconcile the advice that it has from its paymasters.

Mr. Allen McKay: Does the Minister accept that, when he next goes to the teachers' organisations, he will have to discuss the statement by the Under-Secretary of State that there will be no state-funded schools in three years? Does he also agree that children have the right to have education when they are three years old and that this is what teachers advocate?

Mr. Eggar: My hon. Friend rightly said that all schools will, in future, be able to benefit from control of budgets at local level. We know that there will be better value for money and better provision of education locally, as schools will not have to rely on the artificial levels of bureaucracy suggested by LEAs.

"Management of the School Day"

Mr. Evennett: To ask the Secretary of State for Education and Science what information he has regarding the action taken by school governing bodies to implement the DES circular "Management of the School Day".

Mr. Fallon: The circular explained how governing bodies might alter the length of the school day and how they should provide adequate teaching time within the day. Some governing bodies have begun to take action on this—others should do so.

Mr. Evennett: I thank my hon. Friend for his reply. Will he encourage governors to take even more action on this matter? Does he agree that governors have a responsibility to ensure that pupils in schools have options during the school day?

Mr. Fallon: Yes. My hon. Friend will be interested to know that more than a quarter of all primary schools do

not yet provide the minimum teaching time. If necessary, we shall have to give statutory force to the circular published last year.

Mr. Robert B. Jones: Can my hon. Friend confirm that there is no legal minimum for the length of the school week? Is not that an omission from current educational legislation? Would not it do a great deal more to ensure that poor standards in schools were tightened if he introduced legislation to deal with that?

Mr. Fallon: At present primary school weeks can vary from 20 to 25 hours. Why should parents in one area get less teaching for their children than those in another? Unless schools are prepared to meet the new minimum targets we shall have to consider whether to give them statutory force.

Manchester Council (Capital Allocations)

Mr. Bradley: To ask the Secretary of State for Education and Science what representations he received from Manchester city council during 1990 regarding the 1990–91 and the 1991–92 capital allocations.

Mr. Fallon: A delegation from Manchester local education authority and other representatives called on my predecessor on 4 April 1990 and the Department has also received representations in connection with individual projects submitted for the 1991–92 annual capital guideline.

Mr. Bradley: In view of the detailed representations that he has received, how does the Minister justify making a paltry capital allocation to Manchester of £5 million, compared with its realistic bid of £33 million? That decision was described by the chief education officer as a disaster for the education service in Manchester. Does not he understand the anger of parents who cannot get their children into local schools because of lack of investment? Will he receive further representations from me and the education department in Manchester to ensure that in future the Government make a capital allocation which meets the needs of local children rather than at the whim of the Treasury or of Government?

Mr. Fallon: No LEA gets all it asks for. Manchester will get £4·7 million next year, compared with £3 million this year. Manchester would have received more if it had not underestimated the number of sub-standard school places in its bid, if it had bothered to complete the required proposal forms for four further major education building projects when asked to do so and if it had published statutory proposals in respect of the Ducie high school project, which it was advised would be supported and which it has still not done.

Sir Fergus Montgomery: Does my hon. Friend agree that Manchester has below-average education expenditure? Does he find that difficult to justify, considering its high community charge of £425, which is far above the national average?

Mr. Fallon: Yes. It is rather odd that although Manchester's community charge is higher than the average for metropolitan districts, Manchester spends less than half its total budget on education.

History

Mr. Illsley: To ask the Secretary of State for Education and Science whether he has received any representations about the teaching of history in the national curriculum.

Mr. Kenneth Clarke: I have received various representations on the draft order for history in the national curriculum. The statutory consultation process ends on 15 February and I shall take account of all the responses before publishing the final order.

Mr. Illsley: Why has the Secretary of State interfered with the history content of the national curriculum and why has he chosen to focus on the first half of the 20th century? Why will children no longer be able to learn about events of the past 30 to 40 years? Does he accept that those events are of just as much historical importance as other events in history and will he reconsider his decision?

Mr. Clarke: It has been decided that the Secretary of State will lay the orders that determine what should be legally required to be part of the history curriculum and what should, therefore, be the subject of testing when we reach that stage. Having considered the advice of the National Curriculum Council, I have proposed that we should regard the study of history as looking back on events with a reasonable amount of historical perspective and that a distinction should be drawn between history and current affairs. There is nothing to stop pupils talking about important current affairs, but I do not believe that the law should require the study of contemporary events and characters, and examination on those events, as though they were part of the history syllabus.

Sir John Stokes: Is my right hon. and learned Friend aware that, unlike some other countries that either are so new that they have no history at all or, if they have any, are somewhat ashamed of it, we have a long and glorious history which we should offer to all young people?

Mr. Clarke: Pupils will have the opportunity to study our long and glorious British history, together with European history and some aspects of world history. I believe, however, that their study of important events in the Soviet Union, the middle east and other places should end at a point where it is possible to form an historical judgment on events. I have no objection to pupils' talking in the classroom about current affairs, but I do not believe that the law should say that that is part of the history curriculum.

Mr. Straw: Will the Secretary of State confirm that, following a question from me, he was unable to place in the Library evidence to suggest that any political or other bias had been involved in the teaching of modern history —history relating to the past 30 years or so? Does he accept that a good two thirds of GCSE history curricula deal in an historical way with the events of the past 30 years and that that is quite distinct from dealing with them in a current-affairs way? Does he realise that his impulsive decision to exclude that period may overturn two thirds of GCSE curricula and does he accept that people are unlikely to have faith in a national curiculum if they think that it has become simply the partisan plaything of a particular Secretary of State?

Mr. Clarke: I did not give political bias as the reason for my decision; I gave as my reason the need to look at matters in their historical perspective. I believe that the judgments on current affairs that pupils should properly form will be more mature and carry more weight if they are based on a study of the historical background.
For the purpose of history, what is called for is not an examination of the current Gulf war, but—as I suggested in the curriculum—a study of events from the end of the Ottoman empire, taking in the Balfour declaration and the creation of the Hashemite kingdoms, through to the unrest at the time of the mandate, the civil war in 1948 and, finally, the war in 1967. That is the proper subject of the history curriculum; this morning's news on the radio, and current events in the Gulf war, are not. A proper history curriculum with perspective, enabling pupils to view the past and form judgments on it, is the best way for schools to prepare people for making continuing judgments on current events.

Mr. Gerald Bowden: Does my right hon. and learned Friend agree that it is important to teach children hard historical facts and to give them firm dates so that they can relate fact to historical perspective? Is not it time to move away from the child-centred subjective interpretations that we have seen in the classroom so often over the past few years?

Mr. Clarke: I see no point in the study of history unless it is taught in a way that enables the pupil to acquire some knowledge of the factual sequence of events and the activities of the personalities involved. When we move on to the testing of ability and attainment in history, we should pointedly include the testing of historical knowledge. That is not the sole point of education, but it is the essential basis of the understanding of any important subject.

University Education

Mr. Morgan: To ask the Secretary of State for Education and Science when he next expects to meet the Committee of Vice-Chancellors and Principals regarding the future of university education.

The Parliamentary Under-Secretary of State for Education (Mi. Alan Howarth): My right hon. and learned Friend and I met representatives of the CVCP on 4 February to discuss a range of matters. We expect to meet them again from time to time, when both immediate and longer-term issues will doubtless be on the agenda.

Mr. Morgan: I thank the Minister for his reply. Can he explain the basis of the extraordinary decision to cut access funds for our higher education institutions to less than half their present level—from £23 million to £10 million in two years time? Does he accept that access funds have been much touted by his Government as a new and flexible instrument and have been extremely useful to the universities? They have been the eye of the needle, with the would-be British higher education student acting as the camel. Why, having built up the funds, does the Minister intend to take away more than half of them over the next two years?

Mr. Howarth: We have introduced new access funds. They will be available for use at the discretion of higher education institutions to help students who may be in


financial difficulties. By convention, the figures for the later years of the public exependiture survey are rounded down to the nearest £10 million. Provision for 1993–94 will be settled following the three-year review that was promised in the 1988 White Paper.

Mr. Rhodes James: Was the strategy of student finance discussed at that meeting and will it be discussed in future, in the spirit of consultation and recognising that this is one of the key problems that we face?

Mr. Howarth: I take my hon. Friend's point about the importance of consultation on the basis of a rational understanding of the requirements of institutions I am pleased about the exciting and rapid rate of expansion in higher education, right across the board. The rate of expansion has been greater and more creative energy and innovation have been witnessed in recent years in the polytechnics. I have no doubt, however, that the universities will wish to respond. We wish to ensure that the amounts of funding and the funding methodologies are sensibly designed to take account of the needs of universities.

Mr. Andrew Smith: When the Minister meets the Committee of Vice-Chancellors and Principals does he intend to discuss with it the Secretary of State's plans, reported in The Independent on Sunday, to abolish the distinction between universities and polytechnics? Will he confirm that the Government are considering that matter? Does he agree that in order to overcome the binary divide it will be necessary to establish a joint funding council, common quality assurance mechanisms and safeguards for the existing research commitments at universities?

Mr. Howarth: As I said to my hon. Friend the Member for Cambridge (Mr. Rhodes James), some of the most vigorous expansion and some of the most creative innovation in higher education have occurred in the polytechnics in recent years. They are impatient to have the right to university status. My right hon. and learned Friend and I are following with great interest the debate which, as the hon. Member for Oxford, East (Mr. Smith) recognises, raises complex and far-reaching issues.

Mr. Hannam: I congratulate my hon. Friend on the expansion that has taken place at the excellent university of Exeter and at other universities. When he considers future funding, may I ask him to pay particular attention to the need for funds for the repair and maintenance of the buildings of universities that were created in recent years?

Mr. Howarth: I well understand why my hon. Friend takes such pride in the achievements of Exeter university. We have increased not inconsiderably the sums available for capital expenditure; about £200 million will be available for that purpose. Universities have been provided with considerable discretion and flexibility over borrowing, so Exeter university can look forward with some confidence to being able to provide the necessary facilities to support the expansion in student numbers to which undoubtedly it aspires.

Mr. Molyneaux: Would it not be advisable for the Minister to meet the vice-chancellors in the near future—certainly before completion of the Committee stage of the British Technology Group Bill?

Mr. Howarth: As I said in my answer to the hon. Member for Cardiff, West (Mr. Morgan), we meet the vice-chancellors from time to time. Among other important matters is the funding of research and how universities can enter into the most constructive and productive relationship with private sponsors of research. I am pleased that university income from industrial and other sources for research has increased fivefold during the time that this Government have been in power.

Parental Interest

Mr. Amess: To ask the Secretary of State for Education and Science what steps he has taken to increase the interest of parents in the education of their children.

Mr. Eggar: The Government have introduced a wide range of measures to extend the part parents play in their children's education, notably by giving parents a much wider choice of schools, by enabling them to seek grant-maintained status for their schools and by increasing the information available to parents on their children's progress.

Mr. Amess: Does my hon. Friend agree that education is very much a partnership between parents and schools and that it is quite wrong for some parents to expect the schools to take total responsibility for their children's education? Does he also agree that the time that parents spend with their children in the evenings and at weekends can in later years pay great educational dividends?

Mr. Eggar: I entirely agree with my hon. Friend. Many parents spend long periods helping their children. Through our various reforms—including the national curriculum and the reporting mechanism for parents—we shall be assisting those parents. I regret that too many children get stuck in front of the television set as soon as they arrive home from school, that there is too little discussion in the home and that too few books are available. Even the very best teachers and the very best schools cannot effectively educate children in a vacuum.

Mr. Cryer: Does the Minister accept that parents in Bradford are very interested in their children's education and often take part in campaigns in support of the local authority's requests for more money to restore the city's crumbling schools? Is he aware that there are more than 600 temporary classrooms in use there? Surely it cannot be conducive to the provision of good education that some of those classrooms have been in use for so long that they need radical repair or replacement with more temporary classrooms. Does the Minister agree that it is time the Government accepted the representations from both Conservative and Labour majorities that provision be made for a decent level of education expenditure so that Bradford's crumbling schools may be restored?

Mr. Eggar: Yes, that is why, in this year's settlement, there is a 15 per cent. increase in the capital available to Bradford. That is why many parents in Bradford have voted with their feet, both by supporting grant-maintained status for Bingley grammar school and by making application for a Bradford CTC. They know where good education is to be found.

Non-teaching Staff

Mr. Patrick Thompson: To ask the Secretary of State for Education and Science if he will take steps to encourage local education authorities to reduce the number of non-teaching staff they employ.

Mr. Fallon: In December we published proposals to require that, by April 1993, control of at least 85 per cent. of a local education authority's potential schools budget should be delegated to the school level. That is where the right decisions will be made.

Mr. Thompson: Is not it a scandal that, out of every 10 education staff employed by local authorities four are in non-teaching jobs? Will my hon. Friend do more to ensure that resources intended for our schools reach their proper destination? Does he agree that local authorities, particularly Labour-controlled authorities, have a poor record in the education of our young people?

Mr. Fallon: Yes. It is quite shocking that, out of their education budgets, authorities such as those in Cleveland and Coventry should make provision for almost as many non-teaching employees as teachers. We have set new requirements. All local education authorities could do more to delegate to the school level, and all should do so before April 1993.

Mr. Spearing: Does the Minister agree that, however much is delegated to the school level, the main task is to help the teacher in the classroom? Does he agree that the employee ratio—people employed in classrooms, in education offices and in teacher back-up positions—is no measure of efficiency? Does he agree that what we want is proper back-up so that a professional job may be done in the classroom? We need adequate numbers of such people, and we need efficiency. Raw figures are not necessarily any measure of efficiency.

Mr. Fallon: I do not agree. The best judge of the type of back-up that schools need are the heads, the teachers and the governors themselves. It is for them to decide what level, scope and scale of support services are necessary and for them, with their increased budgets, to decide where to purchase such services.

Spelling

Mr. Ian Bruce: To ask the Secretary of State for Education and Science what progress has been made over the introduction of his policy to improve spelling standards in educational establishments.

Mr. Kenneth Clarke: We have made spelling a separate attainment target in English in the national curriculum. The systematic testing of spelling as part of the assessment arrangements for English will begin to be phased in from this summer. I am awaiting a response from the School Examinations and Assessment Council to my request that, in marking GCSE examinations, sensible account should be taken of bad spelling.

Mr. Bruce: Does my right hon. and learned Friend agree that teachers who resist the correction of spelling in subjects other than English do their pupils a great deal of harm? Does he agree that this is indicative, in our teaching system, of educationalists setting the agenda, rather than employers and parents, who are very keen that children

should be good spellers? I am a convert—when I was at school I was a diabolical speller—and as an employer I would not take on a secretary who could not even fill in an application form using accurate spelling.

Mr. Clarke: I agree with my hon. Friend. I hope that he is reassured by my experience, since spelling was raised again in my letter to the School Examinations and Assessment Council, that many teachers share his view and mine. The changes that we are making in the national curriculum and to the GCSE—when I get a response from the council—will lead to all schools realising the importance of spelling, which the public want to be part of the systematic teaching of all pupils.

Ms. Armstrong: We welcome the Government's somewhat late conversion to the recognition of the importance of spelling.—[Interruption.] Perhaps since the Government have been in office for 12 years, they will discover numeracy next. Why is it that during the past 12 years there has been no research on how to teach spelling effectively and no support to teacher education institutions to ensure that teachers know how to teach youngsters how to spell? What a 12-year legacy.

Mr. Clarke: I am not sure that the subjects of reading, spelling and grammar require much more research than they have already had. They require good practice. Through the national curriculum and the changes that I am proposing to the GCSE, I trust that that good practice will soon come about.

Mr. Harry Greenway: Is my right hon. and learned Friend aware that many people believe that spelling was taught effectively in days gone by and that there is no need for more research on how to teach spelling and grammar? Will my right hon. and learned Friend look back a few years and see how it was done then, and remind teachers of the effectiveness of teaching in former times?

Mr. Clarke: I do not usually join in arguments about whether standards have fallen. However, it is the experience of most of us that standards of spelling have dropped in most of the correspondence in which we engage. It is important to tell teachers not how to teach spelling but to underline the importance of it as we introduce the national curriculum and modify the examination system.

Teachers' Pay

Mr. Turner: To ask the Secretary of State for Education and Science whether he will make it his policy fully to fund the award by the Interim Advisory Committee on School Teachers' Pay and Conditions through central Government.

Mr. Kenneth Clarke: The cost of the Government's proposals for implementing the Interim Advisory Committee's recommendations in 1991–92 has already been fully funded by the Government's decisions made last year on local government expenditure. The 1991–92 education standard spending totals announced last autumn allow for the full cost of these proposals, as well as for the follow-through cost of the 1990–91 teachers' pay award, and also include an element for the exercise of local pay discretions.

Mr. Turner: Why are the Government watering down the award when the IAC—a Government-appointed body—has reported to them that teachers' morale is at rock bottom and that vacancy levels have deteriorated appreciably over the past four years? When will the Government recognise that there is a serious crisis in our education system?

Mr. Clarke: We have accepted in full the recommendations of the Interim Advisory Committee and we are phasing them in. [Interruption.] The result will be that by this time next year teachers will have a 9·5 per cent. increase and head teachers will have an increase of over 12 per cent. at a time when inflation is expected by all commentators to be 6 per cent. or below. As a result of this award, teachers will receive a much greater increase in their annual income than other groups are likely to receive in the coming year. That is a good thing. It is especially good that the IAC has introduced new incentives and discretions to enable us to concentrate on classroom performance, shortage subjects and other aspects involved in creating a good career structure for the teachers in our schools.

Mr. Thornton: Will my right hon. and learned Friend accept that this will do much to improve morale in the teaching profession? Will he look particularly at one of the recommendations of the Select Committee report, which urged that all teacher awards in future should keep pace with inflation and not allow us to return to a position in which we have to have the hikes such as we had under the Houghton and Clegg awards?

Mr. Clarke: As I have already said, everybody expects inflation to fall to 6 or 5·5 per cent. by the end of next year. A general pay increase of 9·5 per cent., with 12·75 per cent. for heads and deputies, is far ahead of inflation. Teachers are already 30 per cent. ahead of inflation during the lifetime of this Government. They have already enjoyed an increase in their real living standards and that will obviously increase substantially as a result of the Government's decisions for next year.

Mr. Fatchett: Can the Secretary of State explain to teachers why, when the Prime Minister says that education is such an important issue and when Conservative Members say that the country is enjoying some form of economic miracle, teachers' pay increases are being "phased", to use the Secretary of State's words? Is not that a further indication that the Government do not value education or teachers?

Mr. Clarke: The Government have phased the increases to take into account the inflation assumptions for the relevant year—next year—and also the pay expectations of other groups in the population. The increase in real terms of teacher's income, which is already 30 per cent. ahead of inflation, will go up substantially next year. The money is being distributed in such a way as to reward especially the good classroom teachers, those in shortage subjects and those who take responsibilities in our education system. The pay award is far ahead of the pay awards likely to go to those in equivalent occupations and it is right that teachers should get that preferential treatment.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Maclennan: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February 1991.

The Prime Minister (Mr. John Major): This morning I had meetings with ministerial colleagues and others. I also called on Her Majesty Queen Elizabeth the Queen Mother and presented her with a gift from the Cabinet to mark her 90th year. In addition to my duties in the House, I will be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Skinner: It was a cold weather payment.

Mr. Speaker: Order.

Mr. Maclennan: While welcoming the Cabinet's recognition of my constituent, the Queen Mother, in that way [Interruption.]

Mr. Speaker: Order.

Mr. Maclennan: Would the Prime Minister say why, when he came to the House last week to announce the waiver of the exceptionally severe weather payment seven-day condition, he gave no inkling that it was to last 24 hours and that within four days, his Minister for Social Security and Disabled People would announce that things were to go back to where they are now. The "now you see it, now you don't" approach cannot be the way to look after those who are so heavily dependent upon that payment.

The Prime Minister: If there is doubt about that point, let me seek to remove it beyond peradventure at the moment. As I said last week, given the exceptionally severe weather, we wanted to ensure that vulnerable groups would take appropriate steps to keep warm so we waived the seven-day qualifying period. Given the continuation of severe weather since then, we shall once again be waiving the seven-day period. Of course, we shall continue to monitor the situation carefully and if the cold weather continues we shall take similar measures.

Mr. Evennett: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Evennett: While my right hon. Friend was enjoying his much publicised breakfast at the weekend, the people of Lithuania were voting in a referendum. Does he agree that the desire for independence by the Lithuanians, as expressed in the result of that referendum, should be heeded by the Soviet Union?

The Prime Minister: I sympathise very much with my hon. Friend's point. I would like to see the Soviet authorities negotiate with the elected representatives of the Baltic authorities about their aspirations. That is a point I hope to be able to put to President Gorbachev when I meet him next month.

Mr. Kinnock: Does the Prime Minister share our deep concern that unemployment, business bankruptcies and


factory gate prices are all up while investment and output are down? Whose policies does he blame for that—the current Chancellor's or the previous Chancellor's?

The Prime Minister: I think that everyone shares the concern about bankruptcies and unemployment. We also share the considerable degree of pleasure at the growth that there has been in recent years, at the growth in the number of businesses—which, even last year, was running at more than 1,000 a week—and at the prospects that will continue to exist for this country as we increasingly drive inflation downwards.

Mr. Kinnock: Does the Prime Minister understand that he has taken many of those new businesses—and longer-established businesses—straight into slump with his policies? Why will he not now cut interest rates, use a more sensible system of managing demand and try to stop the slump now, before the damage gets even worse and goes on for even longer?

The Prime Minister: The right hon. Gentleman should know that the generalised slogans that he uses simply will not do. Let me quote to him what even The Guardian said of the alternatives:
As for the Opposition parties, their call for interest rate cuts with no accompanying recognition of the economic realities is politically opportunistic and economically naive.
I agree with The Guardian.

Mr. Kinnock: May I put it to the Prime Minister that, this very week, factory gate prices are up, unemployment will be up and bankruptcies are up? Is that what he intends to continue to do? If so, I put it to him that his policies are hurting just about everyone and working for just about no one.

The Prime Minister: I think that the right hon. Gentleman will find that our policies are working. I believe that that will become increasingly apparent. The right hon. Gentleman referred to the rise in output prices. I must say that I think that that is a suspect figure. In any event, the January figure may well reflect the delayed and continued impact of the autumn increase in oil prices. Throughout this year, the right hon. Gentleman will see a continuing fall in the rise of inflation.

Mr. Rowe: Although at this moment it may seem bizarre to imagine that there could be advantages in transferring from road to rail, will my right hon. Friend confirm that, in better times, when the Department of Transport appraises capital projects it allows for both freight and passenger savings on roads?

The Prime Minister: In so far as I could hear the first part of my hon. Friend's question, I believe that I agree with him. British Rail has a substantial investment level at present; indeed, it is the highest level for 30 years. As the former chairman said not long ago:
the investment programme is about the maximum rate we can physically manage.

Mr. Fisher: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Fisher: Is not the Prime Minister ashamed that an estimated 50 young homeless people are sleeping rough on

the streets of Stoke-on-Trent? They are not eligible for his severe weather payments or his emergency aid. What place is there for them in his classless society?

The Prime Minister: As the hon. Gentleman knows, on a number of occasions I have expressed my concern and outlined the action that we are taking to deal with the position of young people who are sleeping rough. My hon. Friend the Minister for Housing and Planning set out some policies some time ago and explained that a considerable amount of resources would be devoted to implementing them. One of the problems that is recognised and acknowledged by the voluntary groups—if not, perhaps, by every hon. Member—is that some of those who sleep rough have every option to go into shelters but frequently do not exercise it.

Mr. Janman: Is my right hon. Friend aware of press reports which speculate that the public sector borrowing requirement for 1991–92 will be £9 billion? Does he agree that during the forthcoming 12 months it is important that the Government apply the same discipline to themselves as companies in the private sector are having to apply, and that Government spending should take into account prevailing economic conditions, not pretend that they do not exist?

The Prime Minister: We must certainly always take into account the prevailing economic conditions in terms of public expenditure control. That is certainly what we shall do.

Mr. Andrew F. Bennett: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Bennett: Does the Prime Minister recall one of his early votes in the House of Commons on 20 December 1979, when he voted to break the link between pensions and earnings? Does he realise that as a result of that, pensioners have not enjoyed increases in their standard of living through general improvements and that they are now worse off by £22 a week for a married couple and £13 a week for a single pensioner? Does he realise that if those links had not been broken, people would have had sufficient money to pay for fuel, make sure that they had enough to eat and put on warm clothing and so combat the cold weather? Does not the Prime Minister realise that against that background, the announcement that he has made today of the extra £1 heating allowance is extremely miserly?

The Prime Minister: The hon. Gentleman is being very selective in the figures that he quotes. If he cares to examine the degree of net disposable income among all sectors of the community, including the elderly, he will find that it has risen substantially throughout the past decade.

Mr. Lee: Given that our nation likes a modest flutter as much as it likes a traditional Happy Eater breakfast, does my right hon. Friend care to give some encouragement today to those of us who favour the concept of a national lottery designed to provide additional resources for sports, the arts and museums?

The Prime Minister: My hon. Friend raises an intriguing question.

Community Care

Mr. Tom Clarke: To ask the Prime Minister what is Her Majesty's Government's present policy towards Sir Roy Griffiths's recommendation that local authorities should perform the lead role in the provision of community care.

The Prime Minister: The Government's policy on community care remains as set out in the White Paper "Caring For People" and the National Health Service and Community Care Act 1990. Local authorities begin implementation of those policies in April this year.

Mr. Clarke: What steps does the Prime Minister intend to take to deal with the increasing problems of many elderly people in residential care who have witnessed a growing number of closures of private and voluntary sector homes as a result of the care gap and inadequate income support? Will he absolutely insist that elderly people do not suffer, in spite of the need for social service and social work departments to reduce their expenditure in order to avoid poll tax capping, even though the real anxiety is to respond to elderly people's needs, which they recognise in their own communities?

The Prime Minister: The concerns for elderly people that the hon. Gentleman sets out and which local authorities have are well understood and appreciated. He weakens his case by his remarks about community charge capping, not least because a large number of those authorities that face capping do so because of a flagrant and wilful abuse of their expenditure in many aspects.

Mr. Nicholas Winterton: Does my right hon. Friend accept that there is considerable anxiety in local government, not least among the staff of part III residential homes and also, of course, the residents of those homes, that many local authorities feel obliged to put such homes into the private or charitable sector, thus creating considerable instability? Will my right hon. Friend take account of the anxiety, particularly among elderly people and their families, who are deeply upset by the instability that is being created?

The Prime Minister: What we are seeking to do is to ensure the maximum availability of the appropriate sort of accommodation and to ensure that it is provided in the most cost-effective manner. That accommodation may, on occasion, be in the public or the private sector, but it is the quantum of assistance with which I know my hon. Friend is most concerned.

Engagements

Mr. Fraser: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Fraser: Does the Prime Minister recall that shortly before he became Prime Minister he said that the subject that he cares most about is education? He repeated those sentiments at the Young Conservatives' conference at the weekend. I have in my hand the sum total of all those speeches made by the right hon. Gentleman on education since 1979—it averages one line a year. Can the Prime Minister put in the Library any other speeches on this subject, which is so close to his heart?

The Prime Minister: The hon. Gentleman is being uncharacteristically fatuous

Hon. Members: Withdraw.

Mr. Speaker: Order.

The Prime Minister: If colleagues insist, I shall withdraw "uncharacteristically". For the bulk of the period in the House since 1979 I have either been in the Whips' Office, and thus unable to speak, or a Minister with other departmental responsibilities. If the hon. Gentleman had had what undoubtedly would have been an education to him from listening to the speeches that I have made outside the House he would not have asked that question.

Mr. Squire: To ask the Prime Minister if he will list his official engagements for Tuesday 12 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Squire: Despite my right hon. Friend and I both having left state schols at 16 and therefore, perhaps being poor educational advertisements [Interruption.] I said perhaps. Would my right hon. Friend underline his determination that standards and diversity in our state schools are enhanced and improved, and above all, that the staying-on rate of students beyond 16 and 18 is increased?

The Prime Minister: I am happy to endorse my hon. Friend's point. Education is undoubtedly the key in the future to opening new paths for people, not just people with high abilities, but, of course, people with much lesser abilities as well. We want an education system that rewards dedicated teachers and provides education in the state sector of which we can be proud. That is what we shall be increasingly reaching towards throughout the Conservative Governments of the 1990s.

BILL PRESENTED

MISUSE OF DRUGS (ANABOLIC STEROIDS)

Mr. Menzies Campbell presented a Bill to extend the coverage of the Misuse of Drugs Act 1971 to include certain drugs which have been misused for the purpose of improving performance in sport: And the same was read the First time; and ordered to be read a Second time upon Friday 22 March and to be printed. [Bill 83.]

Coal Imports

Mr. Geoffrey Lofthouse: I beg to move,
That leave be given to bring in a Bill to prohibit the import of coal into the United Kingdom; and for connected purposes.
The purpose of the Bill is to end inconsistency and to give British Coal a chance to hold its markets. We know that, when current contracts run out, the chairman of National Power, the largest coal user in the United Kingdom, is planning to import 50 per cent. of the coal needed to run its power stations.
On 14 January, The Daily Telegraph reported that Mr. Baker is planning to seek international tenders for all National Power's coal needs shortly after it is privatised. Another report in the Financial Times on 4 January suggested that National Power would be investing in three new coal import facilities on Teesside, Humberside and Milford Haven.
The special report published by the Committee considering the Associated British Ports (No. 2) Bill asked the Government to take whatever steps were necessary, in the overall national interest, to protect the coal industry. That has not happened, and the Government seem willing to overlook activities that are detrimental to the coal industry.
The Committee considered two private Bills—the Associated British Ports (No. 2) Bill and the North Killingholme Cargo Terminal Bill. The latter was withdrawn because it was amended by the Committee. The Chairman of the Committee, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), said that, in the light of advice from Speaker's Counsel,
We unanimously decided that we wished to see further provision made to regulate any possible future sale of the proposed North Killingholme facilities, over and above the provisions of the existing general law.
He went on:
We therefore unanimously agree that clause 26 of the Bill should be amended with wording along the lines that the installation cannot be sold for 10 years after the passing of the Bill, and thereafter only with the express consent of the Secretary of State.
The issue was not addressed during the proceedings on the Associated British Ports (No. 2) Bill, for two possible reasons. First, in introducing the Bill to the Committee, Sir Frank Layfield indicated that the major improvements to the port at Immingham
were not specifically designed in any sense of the word for coal purposes. They depend specifically upon general industrial and other consumers' current needs and the need to eliminate present existing wasteful difficulties and practices.
Secondly, Sir Keith Stuart, chairman of Associated British Ports, told the Committee that Associated British Ports did not intend to go to the capital markets to raise the finance for the Immingham project. He said:
The company's ability to generate the cash required for its investment in its ports is such that for our foreseeable needs we are expecting the business itself to generate sufficient capital for investments of this kind in terms of the initial cash input.
It is hardly surprising, therefore, that it did not occur to the Committee that a company as profitable as Associated British Ports would seek finance for its proposed new

Humber terminal. But that is precisely what it has done. The Financial Times of 15 January reported that the terminal, with a capacity of 12 million tonnes of coal, is to be financed and run as a joint venture between PowerGen and National Power, and that the generating companies plan to take a 40 per cent. stake each in the company, with ABP holding the remaining 20 per cent. The Financial Times report pointed out that that was at the centre of the generating companies' plans to reduce dependence on supplies from British Coal.
There could have been nothing but sharp practice by the sponsors of the Associated British Ports Bill. The House should understand that the Committee, which was dealing with two Bills at the same time, threw the Killingholme Bill out because it included an amendment giving the right to sell. The Associated British Ports Bill was allowed to proceed because there was never any suggestion in Committee of an intention to sell; indeed, the contrary was the case. It is not beyond the bounds of possibility that the Committee would have taken the same decision on it had it included such an amendment. Now we find that National Power and PowerGen are to own 80 per cent. of the company.
Following that, there is an announcement from Mr. Baker, chairman of National Power, that he intends to import 50 per cent. of his coal from abroad after the end of the 1993 contracts. What the company did in deceiving the Committee and, in effect, the House, was tantamount to sharp practice. Without that sharp practice, I am sure that it would not have received permission from the House to go ahead with the development.
My Bill would give the Secretary of State power, through the House, to control imports of coal. The Secretary of State would be required to base his or her judgment on the national interest and not on short-term commercial interest. The Secretary of State would control people in powerful positions, elected by no one, and prevent them from taking decisions which could destroy the country's reserves of coal for short-term benefit, resulting in the United Kingdom being at the mercy of foreign competitors in meeting the national demands over the medium and longer term.
No one outside the democratic forum of the House should be allowed to take major decisions to destroy a great industry that supplies the main source of our energy when, in years to come, we shall need that energy; otherwise, we shall be in the hands of foreign competitors. Therefore, I ask the House to support the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. Geoffrey Lofthouse, Mr. Kevin Barron, Mr. Allen McKay, Mr. George J. Buckley, Mr. William O'Brien, Mr. Alan Meale, Mr. Peter Hardy, Mr. Alexander Eadie, Mr. Eric Illsley, Mr. Frank Haynes, Mr. Don Dixon and Mr. Joe Benton.

COAL IMPORTS

Mr. Geoffrey Lofthouse accordingly presented a Bill to prohibit the import of coal into the United Kingdom; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 March and to be printed. [Bill 84.]

British Technology Group Bill

Order for Second Reading read.

The Minister for Corporate Affairs (Mr. John Redwood): I beg to move, That the Bill be now read a Second time.
The Bill paves the way for the privatisation of the British Technology Group. BTG combined the National Research Development Corporation and the National Enterprise Board. Except for one remaining semi-dormant subsidiary, all the investments in the NEB portfolio have been sold, put into receivership or liquidated. Therefore, BTG's operations are now those of the NRDC, focusing on technology transfer.
BTG has 188 employees and a turnover of £30 million. It obtains new ideas and inventions from universities, Government research establishments, private companies and individuals. It funds their development to a stage where they can be globally patented. It licenses the resulting intellectual property rights to industry worldwide, gaining an income in the process. Its United Kingdom turnover is only £10 million, which puts its size into perspective in an economy of about £600,000 million. Its investments have included such international successes as cephalosporin antibiotics, pyrethrin insecticides and magnetic resonance imaging technology, used in hospital scanners.
Until 1985, BTG had the right of first refusal to exploit research in the public sector. Since 1985, universities and other public sector organisations have been able to exploit their own scientific advances, often through industrial companies. Despite that, the flow of inventions from universities to BTG has increased since 1985. Today, it is involved with 1,600 inventions, 8,500 patents and nearly 500 licences.
BTG's profits tend to depend on a few projects, making BTG's resulting profit trend uneven. But during the past five years, BTG's operating profits have averaged more than £4 million per year, rising to £6·8 million in 1989–90. BTG has been self-financing for almost 20 years. It has paid dividends to the Exchequer—a total of more than £18 million in the past six years. Transferring BTG to the private sector would rid it of restrictions on borrowing powers, obligations to submit investments for approval by the Department of Trade and Industry and remove the requirement that the salaries of its chairman and chief executive should be agreed with my Department and the Treasury.
BTG wants to develop its activities as an international organisation. It already derives 70 per cent. of its licensed income from outside the United Kingdom. Preliminary steps have been taken to expand overseas, with investments and agreements in the United States, India and several European universities. The original NRDC duties appear increasingly inappropriate for such international developments, and their removal would facilitate BTG's expansion.

Mr. Gordon Brown: The Minister of State mentioned that BTG supports the privatisation. Is he aware that the company has spent £75,000 on commissioning a public relations campaign to persuade

Members of Parliament? Is he aware that page 4 of the document that I have been given, "Communication Programme for British Technology Group" states:
BTG has the opportunity to have a parliamentary friend on the Standing Committee of the Bill.
Will the Minister tell the House whether his Department has authorised the expenditure of £75,000 of our money to lobby Members of Parliament? Has any Minister, or anyone representing a Minister, informed BTG that it has
an opportunity to have a parliamentary friend
on the Committee discussing the Bill?

Mr. Redwood: BTG has many parliamentary friends, and I am sure that its case will be put strongly by those who support it and who think that the management's wish for privatisation is a good idea. I do not know whether any money has been spent in the way that the hon. Gentleman described. I shall look into that, and see whether it is true. I do not know where he has obtained that information.

Mr. Brown: Is the Minister telling the House that BTG has or has not been authorised to spend £75,000 to promote its activities in pursuit of privatisation among Members of Parliament? Does he deny that the Department of Trade and Industry or anyone representing it have given an assurance that BTG will have
an opportunity to have a parliamentary friend on the … Committee"?
We need direct answers to those direct questions.

Mr. Redwood: I have already said that I will let the hon. Gentleman know when I have researched the matter. There is no point in me giving him a categorical denial before I am sure. That is not a question that I have asked. I shall ask it for him and let him know. My hon. Friend the Under-Secretary of State for Industry and Consumer Affairs will give him the answer at the end of the debate, when we have had a chance to go into the matter.

Mr. Simon Hughes: Having been a parliamentary candidate for Peckham in his earlier political existence, the Minister will know that BTG is based in Southwark. When he addresses the issue, will he recognise that there is no overwhelming view in favour of the privatisation of BTG, the majority of the staff are against it, its track record is good and, as far as I am aware, there has been no criticism of its activities in the past? Does he accept that it is perceived that the Government are adopting the view put forward by the management, which is a minority view in BTG, and that that is a dogmatic, not a sensible or rational, way forward for BTG? Has the Minister a closed mind, or does he still have an open mind for the best way forward for this well respected and reputable group?

Mr. Redwood: We have an open mind on the exact style and form of privatisation, and I and my hon. Friend the Under-Secretary of State wish to hear the views of the House on the subject. But we are strongly advised by the senior management of BTG that they believe that it would be in the best interests of the group to pass into the private sector, for the reasons that I have already set out. They are good reasons, which will be welcomed strongly by Conservative Members. The management of BTG are running a commercial enterprise. There are certain restrictions on the group's conduct by virtue of its public sector status which the management would rather be rid


of, because they believe that that would add to their success. I am happy to back that judgment. The Government back the BTG board's view.

Mr. Brown: Will the Minister confirm that 75 per cent. of the staff have expressed opposition to the proposal to privatise the group, and that severe doubts have been expressed by the Committee of Vice-Chancellors and Principals, which says it has not even been consulted about the proposal? Will he publish the Coopers and Lybrand study commissioned by his Department some time ago, which he has never brought to the House or put into the Library but which I understand says that the difficulties of privatising the organisation are far greater than anticipated, and recommends that privatisation should not be proceeded with?

Mr. Redwood: I do not intend to reveal that study, because it has much interesting information that could only help those who might wish to negotiate the purchase of the group. It contains a lot of sensitive information about prospective values, which could only help those who would wish to get a finer deal as a result. But it is not right for the hon. Gentleman to assume something about the thrust of a report that he has not read. He expresses an extraordinary clairvoyance which is unwarranted in the light of the intricate details in the report. One thing that the report does draw attention to is the fact that it could damage top management morale if its clearly expressed view in favour of privatisation were ignored. The hon. Gentleman might like to think about that.
We have consulted the universities widely, and it is interesting to note that only 12 per cent. of those that have responded wish to keep BTG as it is. All the others think that there is a strong case for change. Some believe that a more commercial approach in the private sector would be exactly right for BTG.
My right hon. Friend the Secretary of State has said that he is interested in the views of employees; that is something which I am sure will emerge from the debate and will be carefully read by my right hon. Friend and by my hon. Friend the Under-Secretary of State.

Dr. Keith Hampson: My question relates to the point raised by the hon. Member for Dunfermline, East (Mr. Brown) about the universities. Because the vice-chancellors feel that they were not consulted in the early stages of this process, they are in some doubt about existing arrangements, and I hope that my hon. Friend can now reassure them. BTG holds a large number of university patents, so may we have an assurance that those are not at risk and that the privatised company will offer the same opportunities for technology transfer and the use of university research?

Mr. Redwood: This is one of the important points that we wish to draw out from the debate. It is one of the important details surrounding the sale that have not yet been determined. That is why the Government have come to the House with an enabling Bill, and why we wish to sound out the opinion of the House.

Mr. Alex Carlile: So that we can understand the intellectual basis on which the Government are proceeding with privatisation, will the Minister answer this question? Did the Coopers and Lybrand study come

to the conclusion that it was advisable that this proposed privatisation should not be proceeded with? Will the Minister answer that question with yes or no?

Mr. Redwood: I have already made my comments on this complex study, which provided a lot of background information on the sale. There is no way that I shall be drawn further when there is a lot of price-sensitive information in that report, which could only help those who wish to buy the group more cheaply than they should.

Mr. Michael Grylls: Is it not a fact that one constituent part of the BTG, the National Research Development Corporation, has to get ministerial approval to borrow more than £250,000, which is peanuts in developing a business? Such restrictions stop BTG moving forward. It is a successful group, making good profits, and it could expand much more. I am sure that, if it were explained to the staff—perhaps better than it has been in the past—that when these embargos have been removed, the group can raise all the money it needs, provided that it has viable projects, and that its future will be much better in the private sector, they would be more enthusiastic.

Mr. Redwood: My hon. Friend is right. There is an investment limit above which it needs to refer to the Government. It would expedite matters if the group did not have that limit. The Opposition say that we should change all these rules, but this is a public sector body. It has to be accountable through the normal public sector devices all the time that it remains in the public sector. One cannot make one rule for the BTG and other rules for other bodies.
The House would rightly say that every penny of money going through BTG is a matter for public accountability, and there have to be rules. We say that there should be only commercial rules, because BTG is trying to be a commercial operation and therefore fit better in the private sector, in the way that BTG's senior management are suggesting.

Mr. Merlyn Rees: The Minister referred to the support of top management for this scheme. I have a question about integrity, independence and impartiality. I am informed that, two years ago, the council of BTG declared itself in favour of privatisation, subject to those three Is being guaranteed. Are they guaranteed?

Mr. Redwood: This is another matter that will be reviewed under the enabling powers in the Bill. I am grateful to the right hon. Gentleman for making those points. We wish to go away and to draw up, with our advisers, the detailed proposals for sale documentation, for whatever form of sale may be appropriate.
That is exactly the kind of issue, along with that raised by my hon. Friend the Member for Leeds, North-West (Dr. Hampson), that we shall have to work through, and the debate will be useful. The Opposition now say that they want a blueprint for every issue, but if we had that, there would be no point in the House debating the matter. We are bringing it to the House at an early stage so that we can take enabling powers to privatise BTG. There is an overwhelming case for privatising the enterprise, and we need to discuss the best way forward.

Mr. Gordon Brown: Will the hon. Gentleman give way?

Mr. Redwood: I must make progress. The hon. Gentleman has already asked many questions.
Clause 1 vests all the property, rights and liabilities of the corporation and the board in a newly created company. Clause 2 extinguishes the corporation's capital reserve and the board's public dividend capital, as these will be replaced by the Government's shareholding. Clause 3 provides for the creation of the initial Government shareholding in the successor company. Clause 4 enables the Government to acquire additional shares or securities in the successor company. This, for example, would enable the Government to maintain the proportionate level of their shareholding, if they retain one, in the event of new issues and rights issues.
Clause 6 limits the Government's shareholding as a proportion of ordinary voting rights to the level at which it stands after privatisation. Clause 7 provides for the creation of a statutory reserve and for continuity in the accounts. Clause 8 provides that the Government may make loans to the successor company after vesting has taken place, but before privatisation. That would allow money to be lent if privatisation were delayed for any reason.
Clause 9 provides that any power entitling the Government to restrict the borrowing of the successor company shall be exercisable in the national interest. Clause 10 provides for the continuation of the corporation and the board after the establishment of the successor company to assist with completion of the transfer of assets. Clause 11 deals with the tax liability of the successor company, and clauses 12 to 17 contain various supplementary provisions.
Schedule 1 provides for the corporation and the board to do everything necessary to facilitate the vesting of their property in the successor company. Schedule 2 provides for the repeal of legislation which currently regulates or refers to the corporation and to the board. That is important, because it includes repeal of parts of the Development of Inventions Act 1967 and of part I and schedules 1 and 2 of the Industry Act 1975.
My Department has appointed Price Waterhouse to advise on the options for sale. The choice of option will be influenced by the interest shown by prospective purchasers during the coming months. The Government have made no decision yet about the method of sale and will listen carefully to the views expressed within the House by management, employees and other interested parties before deciding on the final option. I hope that Opposition Members will participate constructively in this debate, rather than giving endless press conferences attacking the whole idea.
The British Technology Group is making money. It has backed some good projects and it now needs the self-reliance of the private sector to go about its business. The Bill abolishes the National Enterprise Board and removes from the statute book the power for more such Government meddling in business.
The hon. Member for Dunfermline, East (Mr. Brown) will doubtless launch a tirade against these changes, as he did earlier this morning in a press conference. He will stand and fall as an advocate of "back to the 1960s and 1970s" failure. He may have cast off his 1960s drainpipe trousers and cut his 1960s student hair, but his ideas are still fixed in 1960s mode. He will conjure up images of the great days of the National Enterprise Board, to be transformed by 1990s high tech and training. We will hear

the usual cascade of invective. He will say it, he will say it again and then he will bellow it. He will say it with repetition, with deviation—although not usually with hesitation.
I hear that the hon. Member for Dunfermline, East once wrote an original speech. Unfortunately, we have had to listen to dozens of versions of the same thing ever since.
I have three questions for the hon. Members opposite. Labour say that the Government need to intervene to increase investment in Britain. My first question to them is, how much taxpayers' money would they want to spend on such an enterprise? I shall happily give way to the hon. Member for Dunfermline, East if he wishes to give the House some real information for a change. But no—he does not seem to want to.
Are the Opposition aware that total investment in the United Kingdom now runs at £100,000 million each year, and that the BTG, by the way, invests just £11 million? Do they have a sense of the significance of those figures? To have any decent impact on the national total of investment, Labour must be planning for Government to spend at least an extra £10 billion, which the market does not provide—and that would still be less than 2 per cent. of GDP, although it is around 1,000 times the figure that the British Technology Group currently spends.
Will the hon. Member for Dunfermline, East confirm BTG would need at least as much as that in his scheme of things according to his analysis of the situation? Is he aware that many of his hon. Friends—I wish more of them were here today—believe that the last two Labour Governments' investment plans were ruined by a shortage of cash?

Ms. Marjorie Mowlam: Is this relevant?

Mr. Redwood: This is the key to the argument. The Bill will remove the damaging powers from the statute book which Labour used in the past and says that it would want to use again. The hon. Friends of the Member for Dunfermline, East feel that, if the Industrial Reorganisation Corporation and the NEB had had more money and made more investments, they would have done better. How does he answer them? Or is the shadow Treasury going to act as the bad nanny, by taking the Socialist toys away again?
My second question is this: why should we believe that the Opposition, with all the talents that are arrayed before us, will be able to spot investments that the private sector has missed? The hon. Member for Dunfermline, East is indeed a talented man—a temporary lecturer at Edinburgh university, a lecturer in politics at a college of technology and a journalist with Scottish Television—but he has never run a factory or made anything to sell in his entire life. And this is the hon. Gentleman who thinks that he could spot all the winners.
The hon. Member for Newcastle-upon-Tyne, North (Mr. Henderson) was a trade union official; the hon. Member for Gateshead, East (Ms. Quin) has lectured in French at two universities; the hon. Member for Kirkcaldy (Dr. Moonie) is a medic; and the hon. Member for Redcar (Ms. Mowlam) was an administrative officer at a college. Not one of them has ever managed a business or made a substantial investment, and none of them has had to rely on clients or customers to pay their wages. Where is the magic ingredient?

Mr. Alex Carlile: When has the Minister ever worked in a productive industry?

Mr. Redwood: For some time, I chaired an industrial company which was deeply involved in industrial life up and down the country. As a Minister behind a Government desk, I would not venture to spot winners, because I know from my business experience how difficult it is and how much it needs the commercial background of the private sector.

Mr. Carlile: Given all his experience as a banker, and his understanding of the City, can the Minister confirm that the most difficult thing for any entrepreneur or new business to obtain is free venture capital, and that the British Technology Group is one body from which it is possible to obtain such capital?

Mr. Redwood: I was trying to draw the House's attention to the sums involved. The hon. and learned Gentleman obviously was not watching last week, when the Department of Trade and Industry announced one part of a new programme of support for the type of investment that he is talking about. We shall be announcing expenditure of £30 million over three years for just such a purpose; that is more than the BTG is offering on its past annual figures. I agree that there is a need; the DTI is meeting it. Overall, the research and development allocation, and the other money available through the DTI, far exceeds what is available through the BTG.
My third question to the Opposition is this: why should the nation believe that the policies will be any different next time? It is not as though we were being offered anything new. The names may have changed, but the institutions proposed in Labour's documents look horribly familiar. Labour wants an NIB: that is one of the reasons for their opposition to the Bill. What does NIB stand for? "Normally Invested Badly"? "Nationalised Institution for Bankruptcy", perhaps? I think that those would be better characterisations than "National Investment Bank".
The National Enterprise Board, in its heyday, was a loss maker that hastened many of its investments to the liquidator. The House should remember the enthusiasm with which the NEB identified that "office of the future" market as one with boundless opportunities. It was right: many private-sector companies have done well by selling fax machines, xeroxes, electronic mail and the like. The final cost to the NEB and the taxpayer of those boundless opportunities in a high-growth, high-tech market were losses of £34 million.
The NEB also had to write off £6·8 million from its United States investment in software—a marketplace in which many others coined fortunes and supplied good products. So much for Labour's chant that next time it would be different, because it would concentrate on electronics and software. That was yesterday's story, and yesterday's disaster for the taxpayer.
Nor was the NEB much better in other sectors. Alfred Herbert, BTB (Engineering), Technalogics Computing Ltd., Microform Communications, Vicort, Mollart Engineering, Momex, QI (Europe), Gemspar, Sandiacre Electrics, Hilton Products, Preformed Road Markings, ASR Servotron and many others all went under. Holdings in Brown Boveri, Consine International, Negretti and Zambra and Energy Equipment, to name but a few, were sold at losses. The losses in tanning and clockmaking were

as spectacular as they were predictable. The NIB, with branches in every major city, would be a sure-fire loser. There might be more noughts on the cheques, but they would go down the same old drain.
Labour also seeks a BTE. "Better Try Everything"? This morning, a sneak preview on the "Today" programme revealed a name change to BTC—"Britain Taking Chances", perhaps. In Labour's public bar all the investments would be on the rocks, and most of Labour's planned subsidies would be illegal under the treaty of Rome.
The British Technology Company could not do anything that the privatised British Technology Group cannot do. BTG has worked with companies pioneering new communications equipment, new farming systems, a more efficient combine harvester and a variable transmission system for cars. It is an important discipline that money should be committed only when there is a prospect of returns. That is the discipline which Labour still has not learnt, or cannot accept.
The hon. Member for Dunfermline, East is, I hear, having a few problems with his right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and his hon. Friend the Member for Derby, South (Mrs. Beckett). Naturally, they do not like him always muscling in on the economy whenever there is a chance of media attention. He really should concentrate on the job he has now.
They are understandably even more worried about the hon. Gentleman's spending habits—thankfully, only shadow ones at the moment, and for a long time to come. There is his passion for regional investment—£10 billion?—and research and development—another £5 billion to make a splash? Perhaps the hon. Gentleman will tell the House how much money he wants to spend on regional investment and research and development. He tells us time and again in his speeches that the core of his proposals is that more money should be spent upon them, through the public sector. Why cannot he tell us how much he would spend and what he would spend it on?
Then there is training. That must be another £2 billion or £3 billion to have any impact. I hear that the shadow Treasury team has said that it would like the hon. Member for Dunfermline, East to be the Member for Duninvesting, Duntraining and Dunresearching as well, for the sums do not add up.
The British Technology Group needs a new future in the private sector. The United Kingdom taxpayer needs to be reassured that the power to back losers through the National Enterprise Board has been removed from the statute book. I commend the Bill to the House.

Mr. Gordon Brown: I intend to deal with the substance and detail of the Bill. The Bill is ill-considered and irrelevant to the huge technology gap that Britain has to close with our competitors. It does nothing to achieve the Government's stated aims for privatization—to increase mass shareholdings, to create greater competition and to remove Government subsidies. The implications of the Bill are potentially destructive for the British Technology Group. The Bill provides no guarantee that BTG will remain British, at the forefront of technology, or even intact as a group. With no better


explanation for it than that given today by the Minister, it is in the end, I am afraid to say, privatisation for privatisation's sake.
The first impression made on anyone listening to the debate and hearing the Minister's speech must be one of surprise—indeed, astonishment. Industry faces one of its worst recessions for years. Output has fallen faster than at any time, with the sole exception of 1980, during the past 60 years. There has been a record number of bankruptcies and closures, even of high technology companies. Nevertheless, the Department of Trade and Industry, with its wide responsibilities for both trade and industry, has introduced its second privatisation Bill in as many weeks. It has followed up its unwanted and unpopular privatisation of export credit insurance last month with this unnecessary proposal to privatise the British Technology Group.
Is it not the case that, as the public expenditure White Paper revealed on its publication only a few minutes ago, that the Government's withdrawal from the British Technology Group is the latest in a line of reductions in Government support for investment in technology? There has been a 25 per cent. underspend on regional innovation grants, a £42 million underspend on industrial research and development, a cut of 40 per cent. on research and development by 1991 and a cut of 34 per cent. on technology transfer by 1992.
Even with the addition of the SPUR scheme—support for products under research—which the Minister mentioned at the end of his speech, support for innovation will fall, in real terms, in the coming year, according to the White Paper. The total cuts in the DTI's budget over the next three years will be of the order of £370 million. I can think of no other Government in Europe who have simultaneously cut their training and industry budgets in the run-up to 1992 but have spent their time instead on privatising national assets that they can ill afford to put at risk.

Mr. Redwood: How can there have been a reduction in support for technology when the British Technology Group has been financing itself for 20 years and has paid dividends to the Government?

Mr. Brown: I am referring to the total technology budget the—budget for technology transfer and for research and development. I am also taking into account the much-publicised announcement—it has been announced five times during the last two months—of the SPUR scheme. At a time when recession faces industry, and when all our European competitors are preparing for 1992, this Government are cutting support for technology.
Let us be clear about the purpose of this Bill. Its main and most immediate effect is to wind up the National Research Development Corporation as a first step towards privatising the national technology organisation—a body that has enjoyed all-party support for four decades; was set up in 1949 to fill a gap in the market place; grew under the Conservative Government of the 1950s; expanded under the Development of Inventions Act 1967 in the 1960s and the 1970s; and developed yet again to suit the conditions of the 1980s. Now that body is to be abandoned to the vagaries of the marketplace, with—as the Minister confirmed today—not a single guarantee about who will run it or from where it will be run, or for the interests of

whom and, as was confirmed in the Minister's answer earlier, not one guarantee about its integrity, about Its impartiality or even about its independence.

Mr. Patrick Nicholls: The hon. Gentleman speaks with great passion. Obviously he is totally against the principles of this Bill. Will he confirm that a Labour Government, should there ever be one, will renationalise BTG? If he is not prepared to give that commitment, there cannot be very much sincerity in what he is saying.

Mr. Brown: 1 can give an assurance that we shall not spend public money renationalising the British Technology Group. I have made it clear—if the hon. Gentleman had followed events, he would know this very well—that we shall set up a British technology enterprise and shall work with the universities and other organisations, many of which are directly opposed to this measure.

Mr. Nicholls: The hon. Gentleman, on behalf of the Labour party, has just announced another initiative. Can he tell us exactly how much money will be invested in it, and whether this will be another priority area?

Mr. Brown: The hon. Gentleman cannot have been listening to remarks made earlier by his Minister for Corporate Affairs. The British Technology Group actually makes a profit. What is being privatised is a profitable group. I have no reason to believe that, operating in the public sector, and working with the patents of universities, our British technology enterprise will not itself make a profit. The purpose is to fill a gap in the marketplace that would not otherwise be filled and to take a long-term view that a private-sector company might not take. I have no reason to believe that the universities will not want to work with us in this enterprise.

Dr. Hampson: The hon. Gentleman has said that the universities are against privatisation. Perhaps he would care to correct that statement. The university vice-chancellors asked for the sort of reassurances that I requested of my hon. Friend the Minister earlier. Does the hon. Gentleman recognise that, since this sort of group was founded, universities have been provided with many new means of expanding their opportunities in the market? They have found private sector companies, and quite often they have set up their own companies, to exploit their research. The needs that led to the setting up of this group no longer exist in the same form.

Mr. Brown: The hon. Gentleman makes a fair point. Indeed, technology transfer organisations and organisations such as BTG have been springing up in universities. However, I must refer to a statement issued by the Committee of Vice-Chancellors and Principals in connection with the Second Reading of the Bill. The vice-chancellors and individual universities complain that, contrary to what the Minister has said, they have never been properly consulted officially about the Government's plans or options for the privatisation of BTG. I should be very happy to give way if the Minister were prepared to explain why he has said that the universities have been consulted. I have reason to believe that many of the vice-chancellors are very dissatisfied with the proposal.

Dr. Hampson: They are not against it.

Mr. Brown: As I think the hon. Gentleman will agree, what they want is a series of assurances that the Minister has been singularly unprepared to give.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): Perhaps I can help the hon. Gentleman. I am anxious to be of assistance to the House. A full survey of the universities was carried out in December 1988. I can give the exact results. The option of a sale to a commercial financial institution was favoured by 20 per cent.; 5 per cent. favoured a sale to BTG management; 50 per cent. wanted to establish BTG as a private foundation or trust, with objectives linked to university research; just on a quarter wanted to keep BTG as it is at present or wanted something akin to what the Labour party wants to set up.

Mr. Brown: What the Minister has just presented is evidence that I have certainly not had until now: that only 5 per cent. want the option that is favoured by management—a management buy-out—and only 20 per cent. want the trade sale, which is what is being pushed upon the Government. In other words, only 25 per cent. want the two main options that the Government are putting before us, and 75 per cent. are not in favour of those options.

Mr. Leigh: rose—

Mr. Brown: I shall give way if the Minister wants to contradict my figures.

Mr. Leigh: One can look at figures in any way one likes. Perhaps the hon. Gentleman will confirm that only 25 per cent. of university vice-chancellors, when surveyed, want to keep BTG in its present state or in the state that the Labour party would like to see.

Mr. Brown: The Minister is misinterpreting what I have said. The survey shows that only 20 per cent. want the trade sale that the Department is looking at, only 5 per cent. want it to go to the management, which is the favoured option of many people, and another 50 per cent. want it to be a trust and not to be privatised in the way that the Minister is proposing. If I have got that wrong, perhaps the Minister will correct me.

Mr. Leigh: That is interesting. Does the hon. Gentleman accept that, contrary to what he said earlier, the vice-chancellors were properly surveyed?

Mr. Brown: No. The vice-chancellors—[Interruption.] Conservative Members should take care to listen to the views of vice-chancellors in universities up and down the country. Many vice-chancellors will feel that the mocking from the Tory Benches when their case has been mentioned is unacceptable.

Mr. Nicholls: rose—

Mr. Brown: I do not intend to give way to the hon. Gentleman, since he is clearly not well versed in the issue.

Mr. Nicholls: Will the hon. Gentleman give way?

Mr. Brown: I have already said that I shall not give way.
The vice-chancellors make it clear that the Committee of Vice-Chancellors and Principals and individual universities have never been officially consulted about the

Government's plans or options for privatisation of BTG. If the Minister wants to deny that, he should write immediately to every vice-chancellor in the country.
This is not an ordinary privatisation or, as the Minister tried to imply, the sale of a downstream company or the marketing of a run-of-the-mill business. It is the privatisation of 8,000 or more patents, involving 1,500 technologies. It includes patents such as those for anti-cancer and anti-depressant drugs and for inventions such as high-performance plastic fibres. Those ideas have been developed by BTG in the public sector; many of them came to BTG only because it was in the public sector, and some of them could be lost in their entirety if the company is transferred to the private sector as the Minister plans.
Our argument is clear. In Britain we need a body to facilitate and foster the development of inventions at the start of the technology chain. We need a body that is guaranteed its existence, which it could not be if it were a mere private sector company. We need a body with the flexibility to take a broader and more long-term view than the merely short-term interests of shareholders might allow. That requires a body run with the requirement to operate in the public interest. Our contention is that, for from public ownership being a hindrance to inventions being developed in Britain, BTG has offered the extra flexibility and scope without which long-term investments may not be given the consideration that they deserve.

Mr. Roger King: The Labour party is on record as saying that winners will be decided on commercial terms and that it will not just pick winners on the whim of somebody else's say-so. If that is so, why cannot it be done in a commercial way—or is it the Labour party's intention to go on stuffing dead ducks as it used to in the 1960s?

Mr. Brown: Is there any better example of a company that has operated commercially and successfully in the public sector than the British Technology Group? Because of its success and because it is next in line for privatisation, the Minister has brought forward today proposals to privatise it.
Let us look not at what Conservative Members say but at what has been said by some of the inventors who have benefited from BTG and believe that it benefits Britain. Magnetic resonance imaging is one of the major breakthroughs in medical diagnosis this century. The BTG said that it is comparable to the discovery of X-rays and is used routinely to generate detailed images of the tissue structure deep in the human body. In May 1990, the former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher) said that BTG had enjoyed outstanding success in managing the patent portfolio. She said:
This invention will do much to generate further major British innovation and keep Britain at the forefront of rapidly advancing technology.
She went on:
This would not have been possible without the pioneering work of Professor Mansfield of Nottingham University".
What does Professor Mansfield say in a letter that he sent to me in the past few days? He says:
I am very much concerned about the proposed privatisation … I fear very much that were such a proposal to go forward the interests of research, research institutions in Britain and indeed, inventors would not be best served … BTG has in its present form served the scientific community very well over the years … had they been privatised I doubt


very much whether the magnetic resonance imaging portfolio that they currently exploit would have earned very much at all".
What is his recommendation? He says:
I feel that the patents on which my name appear cannot and should not be part of any privatisation deal since they were offered to BTG originally on the understanding that BTG was a government department, and on this basis I do not feel that they are free to dispose of them in any way whatsoever without prior consultation with me".
Here is a British inventor of international standing who is prepared to entrust his intellectual property to a body in the public domain and who states clearly that his invention would not have succeeded as well as it did without the activities of the public sector. He believes that the essential development of such inventions can and should be done in the public sector, and he feels so strongly about it that if the body ceases to exist in the public sector, he wants to have no dealings with it in the private sector.
It is no wonder that the Financial Times, one of many newspapers that have expressed doubts about the proposal since it was first mooted, said:
instead of thinking about privatising the BTG the Department of Trade should be thinking how to improve it".
Pyrethrine is the technology applied to some of the world's most widely used insecticides. Did the Government consult the inventor who had entrusted his patent to BTG before they decided on the privatisation measure? The answer is no. Under privatisation, the patent is to be moved from the public to the private sector. The inventor himself, Mr. Michael Elliot, wrote to me saying:
finance from NRDC allowed research to be developed and applied that the private sector had judged to be too speculative or long term.
Support such as this in the public sector can arise only if BTG is allowed to operate with its own structure and integrity. It is wrong to privatise BTG now without adequate guarantees to protect its role in supporting research in Britain.
Yet another scientist of international standing is opposed to the ill-considered privatisation proposal. Brian Oakley of Logica says:
I can see no point in privatising it.
A former director of BTG who has written to me privately says:
I believe it would be a disaster if BTG is sold off to private interests.
The vast majority of staff—three quarters of them—have come out today against the proposal. The Committee of Vice-Chancellors and Principals says, as I have reported, that it has not been properly consulted. The Coopers and Lybrand report, of which the Minister has refused to give details, expressed if not opposition, reservations about the proposals.
Who now supports the Bill? The only supporters of the Department of Trade and Industry are the Government's business machine and the senior management of the British Technology Group. However, I must tell the Minister that the document that I mentioned earlier reveals that he has problems with both those groups as well.
I have here the document that was commissioned by the British Technology Group at a cost of £75,000 for the media campaign and which was prepared by The Communication Group plc. It is now the subject of a communications campaign targeted on ourselves as the Bill goes through the House. A total of £75,000 of our money is to be used to persuade us to agree to the privatisation of BTG. Some £5,000 is to be used to cover

press materials and the entertainment of journalists. Some £2,500 is to be used for a half-day session for the media training of Mr. Ian Hardy and two other senior executives to
explore and develop the privatisation arguments".
There is money to deal with "potentially hostile awkward questions".
What else is in the document for the £75,000? It proposes the "privatisation commemorative gift". The document recommends:
Looking further ahead, some thought should be given to a commemorative gift for the principal commercial partners to mark the occasion.
The gift in this privatisation is the 8,000 patents developed in the public sector which are now to be handed over to the private sector on a plate, commemorative or other.
Who supports the Bill? The document makes it absolutely clear that the Bill has engendered the hostility of the Government's business managers. It states clearly that the Bill
is proceeding against the natural inclination of the party managers
The document continues:
Against this background, trenchant criticism"—
[HON. MEMBERS: "Come on."] I am quoting from a document commissioned by the British Technology Group, which says:
Against this background, trenchant criticism may weaken the business managers' resolve to press ahead with any great speed … the business managers' priorities in all this are a quiet time with no banana skins and a light programme to allow Tory MPs plenty of time in their constituencies.
[Laughter.] Conservative Members have confirmed the problem that I have just identified. According to BTG's own document, there is no support for the measure from the Government's business managers.
What does the company itself want? Does it wholly support the Bill? The Minister said that it had given its assiduous—indeed, enthusiastic—support, although he had to recognise that three quarters of the staff were opposed to the Bill. The document says that BTG wants to make some major amendments to the Bill in Committee. The group will be seeking "firm commitments", which it wants to be "mostly extracted" during the Committee stage and possibly on Report. The document says:
MPs may well be able to extract more from Ministers than the DTI would otherwise like to give.
What is the attitude of the Bill's principal supporters? The Government Whips and business managers say that their natural instinct is against the Bill, and BTG—cited by the Minister as the main supporter of the Bill—proposes to seek to make major changes to it.
The BTG document is worrying in another respect. It suggests that the Government have given the group the opportunity
to have a parliamentary friend on the Committee.
The document continues:
Much careful and extremely sensitive work must be done behind the scenes in the next few days.
If that is what is happening, it is a misuse of parliamentary procedure and it should stop now.
Who is left supporting the Bill? It is none other than the Secretary of State himself. Two days ago there appeared in The Observer an article entitled:
Why I am privatising British technology".
Yet the Secretary of State cannot appear in the House to defend his own Bill. Perhaps he should have added to the title of his article, "Why I am insisting on the Bill being


debated in the Commons when I cannot appear to defend the proposals." He is not so much a no-turning-back Minister as a no-turning-up Minister.

Mr. Redwood: That was most uncalled for. My right hon. Friend has been in India, working hard for Britain. He is travelling back today, as I think the hon. Gentleman knows. The Secretary of State is fully behind the Bill. He is allowing his fellow Ministers to see it through on this occasion because he is busy elsewhere. The hon. Gentleman should withdraw his slur.

Mr. Brown: As the Minister knows, we offered the Secretary of State plenty of opportunities to be here when we debated the Bill. We offered to change the Second Reading date so that he could be here to introduce it. We made the offer to the Department of Trade and Industry.
In the article in The Observer, the Secretary of State explained that he proposed to privatise BTG, first, because it was held back in many respects by its status as a public sector organisation; secondly, because bureaucratic restraints inevitably imposed themselves on statutory bodies; and, thirdly, because BTG will be able in the private sector to take up more opportunities and provide a comprehensive service.
Who is holding BTG back in the public sector? Who is imposing the bureaucratic constraints? Who is denying BTG the opportunity to provide a comprehensive service in the public sector? Who is to blame if BTG is suffering in those respects? If anyone is to blame, it is the Government, who have presided over BTG for the past 12 years. If anyone is holding BTG back it is the Secretary of State, and it is the right hon. Gentleman who imposes constraints. If there are problems—I do not believe that the problems are in any way serious—the Minister should set about solving them. Indeed, he should have solved them years ago. To let the problems persist and then to use them as a pretext for the simplistic measure that we have before us is doubly irresponsible.
The Minister was on the radio this morning and said of BTG's management that they did not think that the Department's involvement helped. I suppose that, if I were in BTG, I should be worried about the Ministers who came to see me.
Is the Minister really telling us that France, Germany and Japan, which have technology transfer organisations similar to BTG, can solve their problems within the public sector but that in Britain it is somehow beyond the imagination of the Department of Trade and Industry to do so? Let us consider what the Secretary of State had to admit in that article. He said:
We must ensure that a framework exists for the dissemination of new technology …
The benefit of the fine work that has been carried out in Britain and overseas research organisations will never be seen unless an effective network of technology transfer is in place.
Is not that the argument for BTG to remain in the public sector?
What guarantee is contained in the Bill that the technology transfer network will continue to exist in the private sector? As BTG has said of itself:
involvement in technology is a natural continuation of, and not a substitute for, research which may have been funded by research councils or other organisations.
In Britain we need a body that bridges the gap between ideas and concepts and develops them to the point of

commercial exploitation. The existence of such a body cannot be left to the vagaries of the marketplace, as the Bill seeks to do. Such a body must be sufficiently flexible and have enough scope to invest for the long term.

Mr. Redwood: Is the hon. Gentleman aware that the amount of research and development finaced by BTG is about 0·1 per cent. of total R and D? Does that mean that all the other R and D does not work or does not count because it is in the private sector? The hon. Gentleman has never answered that point.

Mr. Brown: The Minister has not answered the straight point that I put to him. BTG does a good job in the public sector. If it is thrown into the marketplace there will be no guarantee that it will continue to exist. It may not have the capacity or ability to take the long-term view that is necessary when supporting inventions. The weight of evidence is growing that other countries, such as France, which has ANVAR, Japan, which has its own research and development corporation, and Germany, where corporations and organisations work through the Lander, recognise the need for such a body. So why does the Minister persist in pursuing privatisation in Britain?

Mr. Philip Oppenheim: The hon. Gentleman referred to Japan as a country which has a state-run R and D body. Is he aware that the Japanese percentage of state support for civil R and D is one of the lowest in all the developed countries and has been consistently so for the past 20 or 30 years? Bearing in mind that Japan is indisputably the most successful economy in the world, does not that fact lead the hon. Gentleman to question some of the fundamental suggestions that underlie his beliefs?

Mr. Brown: The hon. Gentleman misunderstands the position. The issue is how the public and private sectors can work together to increase the amount of research and development and new technology that is stimulated in the economy. The hon. Gentleman would do better to consider some of the problems that have arisen in the British economy because of the lack of investment in technology, and to compare us with Japan, which has done far better. He might be more worried about the rise in unemployment in his constituency as a result of the Government's failures.
Why is the privatisation being imposed on us now? None of the traditional arguments for privatisation hold. The 1987 Conservative manifesto said that privatisation was about insisting that small investors and the employees of privatised companies should have a fair chance of buying shares. Yet the Bill contains no guarantee that any new shareholders will be individuals or employees. As the chairman of the company graphically put it:
This will be no widows' and orphans' sale.
The Minister cannot claim that the sale will inevitably be an extension of popular capitalism. Nor will it inevitably increase competition because the Bill opens the way to BTG being taken over and perhaps asset-stripped by a competitor. There may even be less competition as a result of the measure.
Nor will privatisation of BTG reduce the burden on the state—the other argument for privatisation. The 1983 Tory manifesto said:
The burden of financing the state's industries has kept taxes and Government borrowing higher than they need be.


But, of course, BTG gives money to the Government. The Government do not give money to it. There is no argument for privatising it if the argument for privatisation is a desire to reduce state subsidy. Nor will the Government obtain proper value for money if BTG is sold to the private sector.
Does the Minister agree that BTG has £20 million or more in liquid assets, as stated in its accounts, that it has offices worth more than £10 million, investments that are worth nearly £30 million and other assets that could be liquidated for more than £50 million? The price of the sale, however, which has been quoted in the newspapers at the moment is little more than £35 million. When the Under-Secretary replies perhaps he will tell us what is being paid out to sell the company. What is the cost of the Coopers and Lybrand report? What is the cost of the Lazard's report? What is the cost of the Price Waterhouse appointment? What will be the cost of the time taken to change the patents? I understand that just to change the name on patents abroad will cost in excess of £1 million of taxpayers' money.
Far from costing the country money in the public sector, where it is required to break even, the company has made profits in successive years of £13 million, £11 million, £8 million, £10 million, £2 million, £5 million, £7 million, £7 million, £3 million, £6 million, £7 million and £9·5 million. In each year, that company has made profits for this country and paid dividends to the Government, and sometimes it has been required to give extra cash to the Government.
The taxpayer would be far better off with BTG making money for the country in the public sector than gaining limited proceeds from selling it at an undervalued price to the private sector.

Mr. James Paice: We now come to the nub of the hon. Gentleman's argument; it is his view that BTG would be better off in the public sector. Can we take it from that that a Labour Government would, as a priority, renationalise the BTG?

Mr. Brown: I sometimes wonder why I should give way to Conservative Members, because the hon. Gentleman was clearly not in the Chamber when I answered that very same question from one of his hon. Friends. No doubt the hon. Gentleman has had circulated to him a list of questions that he should put to me during the debate. I repeat that we have made it clear that we shall set up a new organisation, British Technology Enterprise, and we hope to be able to work with the universities to develop—

Mr. Paice: rose—

Mr. Brown: I shall not give way again. We shall work with the universities to develop a technology transfer organisation for Britain.

Mr. Paice: rose—

Mr. Brown: It would be an abuse of the House's time were I to give way to the hon. Gentleman again.
Once one strips away the old arguments for privatisation, which have no relevance to the sale, and realises that this could be a trade sale—not so much a case of tell Sid, as tell Lord Hanson and ICI—it is clear that this is privatisation for privatisation's sake. I have come to the conclusion that the only reason for privatising this company now is that it has not been privatised already.
The company is not going because it is losing money, is a drain on public finances, is a big sale that could change the face of public finance, is a sprawling bureaucracy that needs private sector efficiency, or is a sale that will create millions of shareholders—it will not. It is simply going because it is next on the list of private sector enterprises that the Government feel, as a matter of ideology, that they must sell.
Worse than that, however, the same organisation will not just be denied a place in the public sector, but will be transferred to the private sector with no guarantee that it will ever again work in the public interest. The Bill makes that clear. Let us consider the public interest considerations that were part of the Development of Inventions Act 1967 and which will be waived aside as a result of the Bill. Under the 1967 Act, the NRDC had the job of
acquiring, holding, disposing of and granting rights … where the public interests so requires".
In each section of the Act the public interest was mentioned as a reason why the company had to act. Now the Government are telling us that BTG should act purely as a commercial organisation. Viscount Ullswater, speaking for the Government, said that the Government considered that its activities were now of a commercial and training—I think that he meant trading—nature and that was not appropriate for the public sector.
To relegate BTG to the status of just another company surely mistakes its role. Do the Government agree that BTG fills a role that, if it did not exist in its present form, would be unfulfilled in the marketplace? Do the Government accept that, while the company is commercial, and should be as far as it can be, its purpose is not wholly commercial? Does the Minister accept that the public interest demands that an organisation exists for developing inventions and that it should work to a remit broader than merely the interests of shareholders? The public interest is served by having guaranteed the means of facilitating the progression from invention to production in circumstances where, because of the nature of investment, there is a danger that that might not happen.
The Secretary of State has not made up his mind whether any guarantees or other conditions should be written into the Bill. He should not be bringing forward a measure that he has not yet thought through. He is in the absurd position of having made up his mind to privatise even before he has considered the practical implications. The Bill is here because, regardless of other considerations, the Minister believes in privatisation at all costs.
What guarantee should have been written into the Bill? There should be a guarantee that the company will not be asset-stripped and split up. There is no guarantee that it will remain in British hands—not one guarantee that it might not be owned in Tokyo, Taiwan, Korea or Brazil. In past privatisations, a golden share has been invoked, even in the privatisation of ordinary companies like Britoil. Indeed, a limit has been set on foreign shareholdings in the past, but in this case there is nothing in the proposals to suggest that the company may not fall into foreign hands.
There is no guarantee either that the company will remain independent or able to act impartially. Are not the work force right to argue that BTG should not be in hock to another firm and that it should not run the risk of its principal assets—its patents—being auctioned off, frittered away or simply handed over to competitors? Is not


it also right to argue that it must be able to give objective opinions, to be trusted by inventors as impartial, and to be free of influence from a large conglomerate?
There should not be a conflict of interest with shareholders. For example, BTG holds the patent for the next generation of anti-depressant drugs, a patent with a development licence with one company, which might lead in theory to that company capitalised in billions buying over the smaller BTG capitalised in millions. It might lead to another drugs company trying to buy BTG to eliminate that venture. Clearly, the Government measure the risk to the independence, the impartiality and the integrity of the company. If the company becomes a vested interest of one private sector or of one or two private sector organisations, it cannot work in the public interest to secure the independence of the inventor or the best benefit for the country as a whole.
Let us remember that BTG took on the Pentagon only recently over the hovercraft design. At a cost to itself it won the action in the American courts. Does the Minister seriously believe that a private technology company would take on the Pentagon in the interests of British science and technology and would be able to do so from the same vantage point that public status gives to BTG?
When we say that the British Technology Group should be independent, we mean that it should be free from the control of any one vested interest in the private sector. When we say that it should retain its integrity, we believe that it should not be dependent on calculations made purely on behalf of shareholders and purely about profits and dividends, but that the public interest should allow a wider set of considerations to be introduced. That requires a balance to be struck between the need to invest long term in further scientific advance and the need to weigh the commercial cost of doing so.

Mr. Leigh: I thought that the hon. Gentleman might be coming to the end of his speech. I hope that he will tell the House his attitude towards the abolition of the National Enterprise Board.

Mr. Brown: I have made it clear from the beginning that we oppose the Bill. We will oppose it root and branch in Committee, as has been made clear from the beginning of the debate. We have argued that the Bill is doctrinaire and likely to be self-defeating in its ultimate effects on British science, technology and industry.
The Bill has been pursued not because the Government believe in British science, technology or industry but because they believe in privatisation. It is the ultimate in short-term measures from a Government dominated by a short-term approach. To privatise the one Government agency with a key role in the early development of technology, and to abandon it to the short-term pursuits of the marketplace with no guarantee that it will work for the long-term, is short-termism in its worst aspect. When faced with a simple opportunity to show that they are more interested in the long term than the short term, the Government have decided to choose the short term.
BTG is a unique and special company with a distinct purpose. For 40 years, under successive Governments, it has worked to ensure that British ideas benefit British industry in Britain. The company has worked in the public interest for the long term. Now the Government have

decided that it will work in the private interest, probably for the short term. They are not privatising it to create a market discipline, because there is a competitive environment already. They are not privatising it to issue shares, because it is doubtful whether many people will get shares as a result of the privatisation. They are not privatising it principally to raise more money, because they would be better off keeping it in the public sector, with the dividends that come from its work.
The main argument is that none of the arguments about privatisation applies. The privatisation is based on dogma and on nothing else. If anything, it indicates that, despite a change of leadership, the Government have not changed in fundamentals. They are exercising a dogmatic insistence on privatising a successful public enterprise, which is working successfully in the long-term interests of British industry. They would appease the vested interests of their friends in the private sector before advancing the public interest which it is their duty to uphold. Our argument is that we need in Britain a body to facilitate the development of inventions. We will ensure that the public interest is upheld.

Mr. Michael Grylls: The synthetic nonsense and selective quotations from internal documents from the British Technology Group which the hon. Member for Dunfermline, East (Mr. Brown) produced are a smokescreen to cover the real thing that worries the Labour party about the Bill. The Labour party is not worried about the merits of what goes on in the British Technology Group; its only worry is that its chief toy is being taken away from it. The Labour party invented the toy in the 1970s; that was before the hon. Gentleman was here, but I am sure that he will have read about the disasters of the National Enterprise Board in the 1970s. That toy is being taken away from the Labour party in the Bill and will not be available to an incoming Labour Government, however unlikely that event may be; I think most people would consider it most unlikely. The hon. Gentleman is angry because the Labour party has lost that toy. That is why he quoted tittle-tattle from alleged statements by people within the BTG.
It is probably extremely boring to quote what happened many years ago, but there are still hon. Members here who can remember what went on when the National Enterprise Board was in being, and how it went round punting wiith taxpayers' money, trying to pick winners. My hon. Friend the Minister for Corporate Affairs made a good point about the doubt that ,most people would have as to whether the hon. Member for Dunfermline, East has the necessary experience in industry to ensure success in picking winners, whether it is done by himself or by civil servants.
Civil servants have an important role, but it is not to choose where investment should go. If the hon. Member for Dunfermline, East thinks that that is a doctrinaire statement, the fact is that we do not need to guess what might happen in the future because we can look back to what happened in the past. My hon. Friend the Minister quoted company after company that went bust under the auspices of the National Enterprise Board because it picked companies and put money into them for all the wrong reasons. Most of the companies ended in disaster.
I have told the House why the Labour party is wound up about the Bill. It is not concerned about the merits of the British Technology Group, because, as both sides of the House agree, BTG is trading profitably and is a successful business. Actually, it is a small business. This is the first case that I can remember of a small business being privatised, but I welcome all forms of privatisation. Before the hon. Gentleman tells me that that is doctrinaire, let me explain why I welcome privatisation. Again, we do not need to look into a crystal ball because we can read the book.
I do not know whether I can get the hon. Gentleman to agree with me, but I am about to make a non-partisan point; Governments of all complexions have been bad owners of businesses, because they have a different perspective from business men. Business men make judgments on the return from investment. Politicians—the hon. Gentleman and myself—are different animals. We are looking for votes. When elections come, we have to collect votes; the hon. Gentleman has to do that and so do we. Therefore, what happens? When the Treasury has to decide between one investment and another, does it decide to put money into Amersham International—when that company was nationalised it was relatively unknown—or the British Technology Group? Naturally it does not, but it puts money into schools and hospitals, about which people feel passionately, and, collects votes at elections. It does not put money into the businesses that are worthy of investments on their own merits.
We have learnt during the 40 years since the second world war that all Governments have been bad owners and we do not want to return to that. The hon. Member for Dunfermline, East should consider the amazing transformation in the fortunes and fame of such companies—[Interruption.] I wish that the hon. Gentleman would listen for a moment, but perhaps he thinks that he knows it all. Will he raise his head and lend me an ear? Will he try to remember the success of Cable and Wireless, which was a disastrous nationalised industry? It could not even afford to pay enough to recruit a top-class financial director because the salaries of the board were controlled by the Department of Trade and Industry. It is now free to recruit the best brains, and the result is that Cable and Wireless is one of the finest businesses and is spread throughout the world. I could list many other successful privatised companies, such as British Airways, British Telecom and Amersham International which, although relatively unknown when it was nationalised, is now a world winner.

Ms. Hilary Armstrong: I am trying hard to follow the hon. Gentleman's argument but am finding it a little difficult. Is the hon. Gentleman saying that he is content with the amount of investment in, and commitment to, research and development in those areas where we can prosper in the manufacturing industry? Does he believe that we need no commitment from central Government to ensure that it is improved?

Mr. Grylls: The worst possibility would be if politicians were to try to judge the gross amount of investment that there should be in industry. That is a matter for businesses to decide.

Ms. Armstrong: Is the hon. Gentleman content with that?

Mr. Grylls: The hon. Lady asked a question and I shall do my best to answer it, unlike some Opposition Members. She may not like my answer, but I shall at least try to answer it. It is not good for politicians to make such a judgment. We are not very good at it and we embrace all people in the political process, in Whitehall and in Westminster. Our experience shows that such decisions are best left to the people who run the businesses, understand the ins and outs of business, and decide how much to allocate to research and development. It would be wrong for us to interfere. The hon. Lady and I must part company, because we do not agree.
The British Technology Group will have great opportunities in the future. Once it is out of the nest of state control and away from the heavy hand of state interference, it can spread around the world. It is already an international business so, once privatised, it can spread its wings and build its confidence in the knowledge that, if it has a good project, it will be able to raise money automatically through the City or in foreign financial markets. It does not matter where it raises the money. But, left in the public sector, it will be for ever constrained because it will always have to request Ministers' approval before making an investment. Even the salaries of its directors are controlled by Ministers because that is the way in which nationalised industries work. One reason why they have been such a disaster is that they have been unable to recruit the highest level of management.

Dr. Hampson: I agree with all of my hon. Friend's powerful arguments. Another aspect that needs further consideration is that, once the British Technology Group is in the private sector, there is a genuine risk that such a relatively small group could be swallowed up by a major industrial corporation. Although it could, conceivably, make a great deal of money, that could be to the detriment of the company's long-term interests and some of the projects being undertaken. For example, it could be disadvantageous if a major pharmaceutical company took it over as it is involved in so many aspects of the pharmaceutical world. Will my hon. Friend consider that argument and contemplate a golden share being held by the Government to prevent that from happening, at least in the short term?

Mr. Grylls: I do not agree totally with my hon. Friend. If we are to privatise a company, we should let it be free and keep a minimum of ties with it. Whether the Government should hold a golden share is for the Committee to decide. I am sure that those hon. Members fortunate enough to be on the Committee will enjoy doing that work. I hope that I shall not be one of them. It would not be my first contribution to the National Enterprise Board, but it would be my last, to the great relief of the House.
The House should welcome this privatisation, which follows a long path of successful privatisations. The Opposition have produced no arguments today to cause anyone, either inside or outside the House, to be concerned that we are not doing the right thing in freeing the British Technology Group from the dead hand of state interference, control and restrictions. I shall watch, with the greatest of interest, to see what happens to the British Technology Group. As my hon. Friend the Member for Leeds, North-West (Dr. Hampson) said, the group may


change and some parts of it may be put into different hands, but they will not disappear. I wish the group well and support the Bill with great enthusiasm.

Mr. Alex Carlile: There can be two reasons for privatising a company—on its merits, or on account of prejudice. The hon. Member for Surrey, North-West (Mr. Grylls) said, frankly, that he favours all privatisations, which is a straightforward way of expressing a prejudice—I use the word in a literal and not a pejorative sense—in favour of privatisation. The Government have had the opportunity to consider the proposed privatisation and to assess its merits for several years.
As the Minister for Corporate Affairs confirmed when he opened the debate—I am glad to see that he is still in the Chamber, albeit on the periphery—the Government have the advantage of a Coopers and Lybrand study commissioned in early 1988 and available since July 1988, which was just such a study of the merits of the proposed privatisation. We can be sure that that report has not been gathering dust for the past two and a half years, and that the Minister for Corporate Affairs—who has the reputation, justifiably or not, of being one of the cleverest people in the House—will have considered that report with great care.
The Minister will have considered not only the report's conclusions, but the wisdom of revealing those conclusions to the House. His study seems to come to one of two conclusions: either the rest of us are simply not fit to understand the conclusions reached by Coopers and Lybrand or the conclusions are so embarrassing that they should not be revealed to us because the embarrassment would be on the Government.
I asked the hon. Member for Surrey, North-West a straightforward question when he kindly allowed me to intervene in his speech. My question called for a yes or no answer: did Coopers and Lybrand express misgivings about the proposed privatisation and advise that, on balance, it should not proceed or did they not? Will the Parliamentary Under-Secretary of State for Industry and Consumer Affairs, when he responds to the debate—I am sure that he will do so in his customary robust and frank way—answer that question? His hon. Friend the Minister for Corporate Affairs inevitably raised suspicion, because he was fudging the issue and seemed incapable of answering any question with a direct yes or no answer.
Therefore, one is driven to the conclusion that the reason for the report's supression is that it advises against the privatisation. That leads us to the verdict that the privatisation is founded on prejudice. "Let us privatise what we can," says the Minister to himself, whether the merits favour it or not.
As a committed free marketeer, I am all in favour of privatising state-owned businesses when the merits are in favour; but equally, it does not serve the interests of the free market, and it certainly does not serve the interests of the privatised company, if the decision is based upon prejudice.

Mr. Andrew Hargreaves: Will the hon. and learned Gentleman develop his argument to the point where he explains why most of the

board and the council of BTG appear to be in favour of such a move and the press have frequently offered BTG as a possible candidate for privatisation in order to allow it the international expansion which its natural role suggests?

Mr. Carlile: Unlike the Minister, I will answer the hon. Gentleman's question head on. There is a simple reason why the press has spoken of BTG as a candidate for privatisation. Any boring day of the news week when the press are looking around for something on which to comment, one of the first things that comes to mind is what the Government will think of privatising next. They look at the list of Government-owned businesses and, as BTG makes a profit and so, presumably, can be sold for a reasonable price, the press say that perhaps the Government will privatise BTG. The Government themselves have taken the same somewhat simplistic approach to the privatisation of BTG: because it makes a profit—because it moves, as it were—let us privatise it.
I shall answer the hon. Gentleman's first question as I proceed because, on the merits, there is no good case for privatising BTG. BTG has amassed quite a reputation for itself. It is a successful public sector company, albeit a small one. The Minister has asked rhetorically more than once today whether it matters if BTG is privatised, since the Government are increasing the amount of money that is being put into what he broadly describes as "this area", by which I presume he means the research and development of ideas. That is a fair point to make, but there is research and research, development and development, technology and technology.
As one university vice-chancellor has said, there is an acute gap in the market for relatively small, highly speculative investments. That is the type of highly speculative investment which almost every private finance house and private venture capital organisation would not consider. Yet that is precisely the type of project, and the small scale of funding involved is precisely the scale of funding, most often needed to take innovation from the experimental stage to a point at which its commercial potential can be seriously evaluated.
BTG has been almost alone in filling that gap. It is the only organisation which has made it its stock in trade, day by day, to be prepared to fill that gap. A reasonable concern is that a privatised BTG would be driven by short-term fimnancial objectives to withdraw from that area of the market. If it does so, it will be an entirely hit-or-miss operation for the inventor or entrepreneur as to whether he can develop and proceed with his invention.
Many entrepreneurs in the global village in which we live, certainly in the European village in which we live, would go elsewhere with their inventions because they might feel, with reasonable justification, that they were more likely to obtain the sort of venture capital and development support that they needed outside the United Kingdom than within the United Kingdom.
BTG has a valuable asset, but not in bricks and mortar; it is a portfolio which contains promising technologies, varying from voice recognition devices to combine harvesters. But many of them are still at the patenting stage, the early development stage, and are the intellectual property of their inventors, who have only laid the basic bricks of that property and still have a great deal more work to do.
The Minister tells us that the Government have decided to proceed with the privatisation at a stage when they do not know what form it will take, have no idea to whom the company will be sold, and have not decided what safeguards should be put in place to ensure that investment continues. He says that they are open-minded, which means that they have not made up their mind about a golden share, guarantees or foreign involvement. All those matters are up in the air. It will not be possible for the House to amend the Bill to deal with such issues in Committee because of its nature and shape.
We may find that BTG is privatised successfully in a financial sense, with plenty of other companies prepared to pay large sums of money for it, but they will be paying for the portfolio, a list of tradeable assets—patents which can be sold off, and technologies which can be dispersed undeveloped. There is no guarantee from the Government at this stage that anything will be done to preserve the value of that portfolio.
I venture to suggest that little can be done to preserve the value of the portfolio once it is dispersed. If it were to be done, the Government would have to develop a new body of law to protect certain aspects of intellectual property which would be inconsistent with the thoroughgoing and needed review of intellectual property law which the Government have already carried through Parliament.

Mr. Simon Hughes: As my hon. and learned Friend knows, I represent the constituency with the largest part of the British Technology Group. It is feared—I say this seriously to the Minister—that the collective expertise of the people working as a team is at risk. The management may consider that the group could do well in the private sector, but that does not explain why there cannot be complementary activity, some in the private sector, as happens now, which is perfectly justifiable, and some in the public sector, to do what the private sector either is not doing or will not do, or what it can do best. It is the Government's failure to address that aspect which has caused most of the employees to have no confidence in the Government's proposal.

Mr. Carlile: I am grateful to my hon. Friend; he has taken a great interest in BTG, which is in his constituency. A great and broad body of expertise has been built up within the group. As my hon. Friend will confirm, we are talking not merely about a group of technologists but about scientists, patent agents, lawyers and other experts in intellectual property, and financiers, people who understand venture capital, that most difficult thing to obtain at reasonable rates of interest in what is essentially a fee-generating City of London. As the Minister well knows, there is no interest in the City of London in developing new ventures; the interest at the moment is in churning out fees.
BTG is a multi-disciplinary body which has been working for Britain, trying to secure a real place in the world for Britain's young and vital technology. It has been fighting to ensure that we do not have the fiasco that occurred after the last war, when the patents that could have been obtained for the British discovery of antibiotics were not taken out and all corners were able to move in and make trillions of dollars out of British invention.
The BTG should stand independent of Government, although publicly funded. It is open to that body to sell parts of its portfolio or to license others to manufacture

products that are part of its expertise. That must be right. In the end, however, there must be a Government-funded agency. There has to be an agency that is able to pick up those inventions which have the imagination that floors the City of London, but which the Government, with their necessarily patriotic view, will be prepared to back a little way, and then perhaps a little way more and so on, until one turns into the successor to the light bulb or the antibiotic. This will not happen if the BTG is taken into the private sector and nothing remains in the public sector to act as a longstop for the great inventiveness of British scientists, technologists and engineers.
Perhaps, if the Government had come to the House with much clearer proposals, and had been able to say that, while they were privatising the BTG, they were also establishing a structure to pick up the residue that needs to be dealt with in the public sector, we might have been able to support the Bill. As it stands, its proposals are too diffuse, because they have been motivated by the Government's prejudice in favour of privatisation rather than by an argument on the merits.

Sir Trevor Skeet: The hon. and learned Member for Montgomery (Mr. Carlile) raised an interesting point about the Coopers and Lybrand report. If he were a Minister, would he be prepared to release confidential information that could be of use to the pharmaceutical industry, especially if, by doing so, he would destroy the independence of the organisation?

Mr. Alex Carlile: I did not argue that all the confidential information about pharmaceuticals should be released. I asked a specific question: did Coopers and Lybrand come down in favour of privatisation or against it? The House would find that answer to theat question instructive.

Sir Trevor Skeet: The hon. Gentleman is asking for a little part of the report without the entire report. One may need to read the entire report before finding precisely the case that it makes.
The hon. and learned Gentleman also said that there was no case for privatisation. Let me give him some ideas. It is no longer appropriate for an international, commercially viable operation to be answerable to Ministers, civil servants and the Treasury. I agree that BTG grew up under an umbrella, that it was safeguarded and out of international competition. Now, we are moving into an era in which, if it is to expand, BTG will have to be privatised.
I have a second, compelling argument in favour of privatisation. Certain overseas Governments find the idea of a state-sponsored agency or company unacceptable. For example, when the French Government wanted some research to be handled by a United Kingdom agency, it refused to allow a Government-owned agency to carry it out. BTG did not get the contract. Is that of no significance? BTG proposed a joint venture with a Spanish firm. That required the approval of the Spanish Cabinet solely because the BTG had public sector status. Questions were not answered, and the whole project was abandoned. When BP was substantially nationalised, it tried to get certain licences in Turkey, but could not do so because it was a state enterprise with a large state investment. It will be hard for Opposition Members to deal with that point.

Mr. Simon Hughes: While there may be political reasons why another country does not wish to deal with a state-owned enterprise, no Opposition Member has argued that there should not be private sector activities developing British technology. There should be as much as there is now and more. We are arguing that there should also be a subsidiary state sector. Just as there is accountability for science and the arts, through funding from the Government, so such technology should have some Government link and direction.

Sir Trevor Skeet: I do not accept that. This is a viable company which has reached a point of maturity at which it should be put in the private sector because it is commercially oriented. If there were any other competitors, that would be the luck of the draw, but no specific provision should be made for that. We are told that the Labour party has its own ideas, but, like many of its other schemes, they will not work.
My third example concerns Government restraints. The size of group investments has to be scrutinised first by the Department of Trade and Industry, not by the board. Such matters should be decided at company level by BTG. Appointment to the top posts is settled by the Secretary of State for Trade and Industry. The Department monitors all BTG activities, as does the Treasury, and if the Treasury is short of cash, it can prune the group spending. BTG is required to pay a fixed percentage of profit to the Government. Operating profits after tax were £6·8 million and tax and dividends paid to the Government were £6·1 million. That is too heavy a burden for a new company, so it should be pared down in such a way as to leave sufficient resources for expansion. I should have thought that those points made it clear that it is essential that the company moves into the private sector.
I agree with the hon. and learned Member for Montgomery that the group has a valuable combination of professionals. No more than he does do I wish to see it broken up. I regard it as a centre of commercial excellence. I should not like to see it dismembered. There is a staff of 188, including six solicitors, two barristers, 18 patent agents plus two trainees, 15 financial managers, six of whom are on the venture capital side, and 60 specialists in technology transfer in the operating division, whether that is pharmaceuticals, engineering or anything else.
We must recognise that most large companies, such as ICI, Unilever, the Royal Dutch Petroleum and the Shell group, have a department through which they do their own patent and licensing business in-house. The big difference between BTG and these companies is that it specialises in dealing with all this expertise and sorts out patent and licence problems. I should not like to see it disintegrate, because it has an assembly of professionals. However, steps should be taken to release the enterprise from the restraints created by a too-close association with the state. I believe that many people will appreciate that point.
I have another reason for admiring the enterprise. It has an aggressive enforcement attitude to rights arising out of patents, particularly during the 1980s. Over the hovercraft, BTG filed an action in the United States and claimed compensation from the United States Government—the Pentagon—for infringement of the United States hovercraft patents. There was an out-of-court settlement,

thanks to the persistence of the enterprise, of $6 million from the United States Government. That was an outstanding achievement, and I commend it.
Another case was nuclear magnetic resonance imaging. There was an out-of-court settlement by the United States health care group Johnson and Johnson for patent infringement. By taking aggressive action—as such a small company can—the group has built up its commercial reputation for independence and impartiality, and I should not like to see that destroyed. It has also used discretion in inter-corporation licensing.
The BTG has a broad network with universities—it has technical transfer agreements with 50 universities, plus one abroad, with 17 polytechnics, and with eight medical schools. The hon. Member for Dunfermline, East (Mr. Brown) said that there were no consultations, but that is extraordinary coming from him, because none of the nationalisation proposals put forward by the Labour party have included consultation with the industries involved. Surely it is up to the Government to decide whether this industry continues to identify commercially useful ideas and to search out solutions with academic institutions and private and public sector research establishments. In 1990, its new business was made up of 46 per cent. from academic institutions, 12 per cent. from Government research bodies and 42 per cent. from the private sector. The group is increasing its work in the private sector and should therefore be considered a private sector enterprise.
The group also has a broad network of contact with research councils, for example with the Science and Engineering Research Council, which carries out much of its own work, but I daresay that that collaboration could be extended in future, and with the Medical Research Council, which largely deals with its own work but perhaps should delegate it to a private enterprise like BTG. The group also does most of the work of the Agricultural and Food Research Council. When its monopoly of work from Government-funded research was terminated in 1985 it was probably a good thing, and BTG has now recognised that fact.
I have been singing the praises of the enterprise and have given a pretty clear indication of why it should be commercialised in the true sense of the word. It is a unique institution, with few competitors. One competitor is the American Research Corporation in the United States, but that is much smaller and BTG has an affiliate there, which makes sense because in 1990 40 per cent. of its income came from the United States, 20 per cent. from Japan and 10 per cent. elsewhere abroad, with the balance of 30 per cent. in the United Kingdom.
There are few competitors in the United Kingdom. Oxford university carries out its own work. Impel Ltd. carries out work for Imperial college and 3i. Those are the only competitors in the United Kingdom, except for a large amount of in-house work carried out by some of our larger enterprises. France and Germany are untapped fields for the company. It is associated with Eurotech and with the European institute of technology and, because it is well dug in there, I envisage there will be every opportunity for moving ahead.
I have mentioned several ideas for how privatisation should be effected, but impartiality and independence are paramount and should be protected. Without them, the company would not be able to do work in the United


Kingdom and abroad. There is no reason why that work should not be continued if a suitable privatisation is carried out, which is what the Minister intends.
There must he some protection against asset stripping. Any industrialist would look at the group and think it was a good company to acquire. For example, it does a lot of work in pharmaceuticals and, if it were taken over, the company acquiring it would know all about its competitors and would have a long list of perhaps 8,000 patents, either in existence or being applied for. I suggest the following possible solutions. There could be a flotation through the stock exchange with the retention of a golden share, which would always be retained. There could be an allocation of shares to the staff and, as they would have an interest in the enterprise they would be loth to concede it to any foreign enterprise or to another company in the United Kingdom. The flotation could provide that no foreign company could take over a key industry to the United Kingdom. The allocation of shares could be limited to one shareholder, which would prevent sector domination, and I hope that the Minister will consider that. Also, the establishment of a trust has been mentioned and it is interesting to observe the analysis made in December 1988 that 50 per cent. of people interviewed were in favour of that. It would be for the Government to work out the type of trust.
The Government are wise to introduce the Bill in the way that they have done. They have set up a limited liability company, into which all the shares will go, and at a later date they will decide on one of the ideas that I have mentioned, or will perhaps select another. Then the company will be in the correct shape for privatisation.

Mr. Mike Watson: The hon. Gentleman was talking about the safeguards which he felt should be introduced. I hope that he will press them strongly on the Minister. However, he did not mention the patents held by BTG that have resulted from research in universities. Universities and individual academic inventors stand to receive royalties for many years to come. How does he propose to protect them?

Sir Trevor Skeet: They would be protected because they are subject to agreements at present. If inventions have been patented by BTG on behalf of universities or by the universities themselves the inventors will be safeguarded. I cannot see any great difficulty. The agreement could be transferred to another body that takes over the group.
There could be a case for an institutional purchase by a major finance house, which would maintain impartiality and the independence of its commercial operations. I suggest that the Minister might study that idea. Obviously there will have to be an independent show, which is not interested in any sector in particular. One could probably find the right solution along those lines.
Price Waterhouse is making a report on privatisation, which is probably the most advantageous way to proceed, and I shall be interested to read it.

Mr. Simon Hughes: The hon. Gentleman might not be allowed to read it if the precedent of the Coopers and Lybrand report is followed and it produces a conclusion but we never know what it is. Perhaps we shall all remain in the dark with the next report.

Sir Trevor Skeet: I think that the Government will release whatever information that they receive, provided

that it is not confidential—[HON. MEMBERS: "Oh."] If the report is confidential the information cannot be released —it would injure not the Government but the companies concerned, and they have clients who may be involved. It would be a good idea if Members of Parliament could read at length a report on methods of privatisation and study the recommendations made, so that they could make an accurate assessment. I believe that that is precisely what the Government will ensure.
The group has been working for some years, is viable and has been paying a lot of tax to the Treasury. It has international credit not merely in the United States but in Japan, India, the United Kingdom and many other counties. We wish it to continue. Now that it has reached the end of the springboard, it must go for further competition, and the only way in which it can do that is to become part of the private sector. The public sector contains too many restrictions and limitations, and foreign Governments may refuse to deal with bodies simply because they are state agencies.
I wish that Opposition Members would recognise the merits of the Government's proposal. That applies to the Liberals as well as Labour, but it is Labour that is thinking back 20 years. If it continues to think in that way, we shall never get ahead. I welcome the Bill and hope that it will have a very successful Committee stage.

Mr. Mike Watson: It is evident, especially from what the Minister and his colleagues have said, that there is no clear demand for the Bill. We have been told that the council of BTG supports it, but that is not entirely surprising: for reasons that I do not fully understand, the council feels constrained by the Department of Trade and Industry. BTG seems to me to be operating perfectly well now, and it is certainly profitable. Where, then, is the demand for the Bill?
I shall not rehearse the arguments, but I believe that dogma is at the root of the legislation. It is likely to produce a much less effective private-sector successor, with consequent damage to technology transfer procedures and, equally important, a reduction in the protection available to patent holders.
In the past, the Government have cited as part of the rationale for their privatisations the need to reduce the drain on public resources when nationalised industries are inefficient and unprofitable. We have already heard that BTG in its present form is not only highly efficient but extremely profitable. Last year, it managed a profit of some £7 million on a turnover of £30 million—a good performance by any standards, and in itself an increase of some 24 per cent. on the previous year.
Nor can it be said that a sale would raise much for the Government coffers: being undervalued, it is likely to realise only £35 million to £45 million. We have often been told in the past that one of the Government's aims is the pursuit of a wider share-owning democracy. That aim will not be served by the Bill, which will not extend share ownership among the general public.
BTG makes no demands on the public purse; quite the opposite. It is accountable to the Secretary of State, but is entirely self-financing—which, I believe, is testament to its success. It continues to benefit from the fruits of its expert judgment, and that of its predecessor bodies, over the past 40 years.
If the public or the national interest is to be served, BTG should remain in the public sector. When plans to privatise it in 1988 were announced, they provoked an outcry in the scientific and research establishment. Not only is there no demand for the privatisation; there has been an outcry in the world of academia and research. There are two main reasons for that. First, the bulk of BTG's income is derived from technology transfer, largely as a result of its having the flexibility to adopt a longer-term view based on technological as well as commercial judgments. By contrast, traditional venture capitalists seek shorter-term returns from equity investments.
BTG's profits are reinvested through research and investment—the seedcorn of the country's future. They are not paid out in dividends, apart from the amount that BTG is obliged to give the Government. That amount is, in any case, modest. BTG is not driven by the same considerations to which a private company is obliged to give precedence. For that reason, private-sector organisations are inhibited from underwriting the long lead-in times that are often necessary to allow a new product to develop and realise its commercial potential. The Minister ascribed no importance to that aspect, although I am sure that he is aware of it. Venture capitalists typically allow a lead-in time of five to seven years, although many inventions may require 10 to 15, especially in the pharmaceutical sector.
I have mentioned the importance of seedcorn capital. Writing in the Financial Times, David Sawers, an economic consultant, said:
Most venture capital funds are looking for projects which involve limited technical risk, and can be evaluated primarily on commerical criteria…Fund managers accept that a gap exists in the supply of funds".
BTG has not filled that gap entirely, but it has gone much of the way towards filling it. If it ceases to exist—which is the aim of the Bill—the gap will widen, and many young researchers with good ideas capable of development may well be denied the opportunity to develop them.
The lead-in times that are often required are unlikely to attract shareholders; there must be more attractive options for those involved with venture capital. No less important, however, is the question of patent infringement. Scientific and academic opinion are united in the view that BTG will constitute a more formidable deterrent to patent infringement as a public-sector body than as a private company. As a private company, it would have little clout, and doubtless even less enthusiasm for protracted and inevitably costly legal action. My hon. Friend the Member for Dunfermline, East (Mr. Brown) mentioned BTG's pursuit of the Pentagon in a case not so long ago. It is surely inconceivable that a private company would be prepared to invest the money that it takes to pursue such actions.
Overseas predators, paying lip service to patented products, are likely to see the United Kingdom as a soft touch in future. That would leave our universities cruelly, indeed dangerously, exposed. What price multinational companies riding roughshod over academic and research institutions—particularly given the weak financial position in which many universities and research establishments now find themselves as a result of the Government's consistent underfunding over the past 10

years? They are simply not in a position to defend themselves if multinational companies choose to brush them aside and carry on regardless. That, too, represents a gap in the Bill, with which I hope the Secretary of State will deal.

Sir Trevor Skeet: The hon. Gentleman is talking about the inability of a private enterprise to proceed with infringement actions. Why should he come to such a conclusion, given that most of the litigation is now private in any event? When the political machine is behind something, it will impose all the inhibitions of politics. It is only because we have a good team here, working together, that this course is being taken. That team will be preserved in the new enterprise, and surely it will proceed with its litigation as it would be expected to do.

Mr. Watson: I did not say that companies were unable to proceed; I said that they would be very reluctant, because of the cost. A company taking over the complete portfolio of BTG might regard, for instance, magnetic resonance imaging as one of the lucrative aspects, and in that event it would clearly be worthwhile to pursue legal action. But, in many other instances, a Japanese or European company might choose to steal an invention, and the company that had bought BTG might decide that it was not worth its while to take legal action.
Over the years, BTG has forged a relationship with the academic establishment as well as with leading companies, which has ensured that the best of British research can be developed into marketable products. At a time when manufacturing industry is on its uppers, we need alternative sources for the future regeneration of British industry. It would be a tragedy if we closed any doors, because people with useful ideas could not see those ideas developed. I fear that that relationship between BTG and the academic and industrial establishments is likely to be destroyed if the privatisation goes ahead.
My hon. Friend the Member for Dunfermline, East referred to the opposition of eminent researchers and industrialists. The New Scientist, a publication respected by many who are concerned with and for the British Technology Group, says:
If the British Technology Group does go private, the Government will one day have to invent an organisation staffed by people with time to spare to wander through academic research laboratories—an organisation that can act at the cutting edge of innovation to promote ideas that are too tentative to attract hard-nosed investors.
That underscores my previous point regarding legal action.
The British Technology Group does an excellent job, as evidenced by its performance over many years. It makes profits. Far from using up public money, it contributes to public funds, albeit modestly. For the reasons that I have outlined, it should be allowed to continue to do its job. One should bear in mind the old maxim, "If it ain't broke, don't fix it."

Mr. Phillip Oppenheim: The Opposition's attitude to the privatisation of the British Technology Group is based in part on the hope that BTG in the state sector could become the centrepiece of some type of interventionist industrial strategy. Opposition spokesmen often refer to the need for an industrial strategy, by which I assume that they mean more state


intervention—which of course means politicians and civil servants making the decisions about the British economy. It is too often forgotten that we have tried such industrial strategies before.
Industrial strategies such as those advocated by the Opposition were tried for about 35 years after the second world war. What did we get out of it? It led to a sorry array of industries—steel, coal, nuclear power, shipbuilding, cars and motor bikes—none of which was a paragon of industrial or economic success. When the previous Labour Government tried to create a rival for IBM through the vehicle of the National Enterprise Board, they sponsored an organisation called Nexos; that, too, was an abject failure. Before Nexos went bust, it had lost more than £30 million. Its main achievement was to import a large quantity of Japanese-made facsimile machines which, after Nexos went out of business, it sold for the sum of £1.
We have tried all that before and it has failed dismally, disastrously and abjectly. It is interesting to note that one of our most successful industries since the war has been chemicals and pharmaceuticals. That is one of the least subsidised industries.

Mr. Gordon Brown: They are two industries.

Mr. Oppenheim: The hon. Gentleman says that they are two industries. Perhaps he is splitting hairs. For his information, chemicals and pharmaceuticals are closely linked. Some of our main chemical companies are also our main pharmaceutical companies. I refer to companies such as ICI.
Our chemical and pharmaceutical industries have been the least meddled with and the least subsidised since the war, yet they remain among our most successful. Two of the industries that have been most interfered with by politicians since the war are steel and aerospace. They lost their share of the international market until the beginning of the 1980s, but they regained a great deal of their market share during the 1980s. To a large extent, they were liberated from Government control, since when they have performed strongly.
The iron and steel industries, which had chronic trade deficits in 1980 after 30 years of meddling and interference by politicians, have made substantial surpluses since then. Last year, the British iron and steel industries registered a net surplus of £1 billion. British Steel is now recognised as one of the most efficient steel producers in the world.
Under the previous Labour Government, manufacturing output fell in the 1970s. When Labour's industrial planners were in charge of the economy—supposedly wedded to the great idea of a strong manufacturing industry—manufacturing output fell. Under a more free market economic regime in the 1980s, British manufacturing output increased faster than that of any other European country.

Mr. Rees: Is the hon. Gentleman saying that manufacturing investment did not fall greatly during the early years of this Government? If he says that manufacturing investment has increased, he must, according to the figures, have chosen a different base.

Mr. Oppenheim: I was referring to manufacturing output, not to investment. Manufacturing output in the 1980s—I accept that that is not the whole of the Government's period in office—rose faster than in any

other European country. If we include 1979, manufacturing output increased by about 12 per cent., which was faster than the increase achieved by most other European countries. It was certainly faster than that achieved by the previous Labour Government, when manufacturing output fell.
If we consider the raw investment figures, it does not look as though it has increased very much in real terms. However, the quality of the current investment is much better. During the 1960s and 1970s, much of that investment was directed by civil servants and politicians and was wasted; money was invested in unwise projects. A great deal of the investment in the 1980s was of a far higher quality. Investments were made as a result of a myriad of market decisions. They tended, therefore, to yield better results. I suspect that the hon. Member for Dunfermline, East (Mr. Brown) would question that assertion.
Labour's magic solution for our industrial strategy is just as much a red herring now as it ever was. They want a return to the bad old days when politicians made decisions for business men, while preaching that profits are bad and have to be equated with greed or crude materialism. That is hardly likely to help British industry. Simplistic solutions, such as a Government-directed industrial strategy, have been tried before and have failed.
The extent to which such a solution persists in Opposition circles is based on a misreading of Japan's success. Many people hold the mistaken belief that Japan's industrial success is founded on a successful state-industry partnership, as embodied in Japan's Ministry of International Trade and Industry. MITI is not nearly so powerful as is made out by those who use the MITI myth as an excuse for their own failure, or to lobby for more subsidies or more protection at home. Many of Japan's most successful industries have completely shunned MITI interference. In the 1950s, for example, MITI tried to consolidate the Japanese car industry and to produce a people's car on the lines of the Volkswagen Beetle. That was a complete failure. None of the Japanese car companies agreed to co-operate with MITI. The record of the Japanese car industry since then speaks for itself.
Many of Japan's most successful industries have received little help or guidance from MITI. I could quote many examples, but three will be sufficient—photocopiers, excavators and motor bikes. All three have had little involvement with MITI. However, many of Japan's least successful industries have been the recipients of large amounts of MITI aid. A MITI-sponsored restructuring of the aluminium industry left it very weak internationally. Many point to the Japanese steel and shipbuilding industries as the supposed paragons of MITI's interventionist approach. However, when a team of economists visited Japan in 1968, at a time when its steel and shipbuilding industries were rapidly overhauling those of Western countries, they found that MITI's aid to the steel and shipbuilding industries was almost insignificant and that other factors, such as Japan's underlying structural competitiveness, accounted for their success.
Other industries where MITI supposedly had a large hand in Japan's success were computers and electronics, semiconductors and components. However, MITI's subsidies to those industries were minuscule compared with the overall research and development requirement of the companies involved. All the OECD, GATT and World bank reports show that Japanese subsidies to the electronics industry were lower than those for the


electronics industries in Europe and the United States, where such subsidies have often been disguised in Pentagon or NASA budgets.
There are many reasons for the failure of interventionist policies. Far too often, decisions on whether to invest money are made for political rather than for commercial reasons. A classic example is the British steel industry since the war. In the early 1960s, a private sector steel company was told that it would be given a licence to build a plant in Wales only if it built part of the plant at Ravenscraig in Scotland.
Too often, when Government subsidies are about, it is the most powerful lobbyist—not the industries that really need the money—who gets the largest slice of the cake. Too often, the industries that are promoted by politicians are simply unsustainable for the underlying fundamentals of the economy. Quite often, they are simply too advanced.
I am thinking, for instance, of the attempt by the European Community to foster a semiconductor industry. So far, it has been an abject failure. It has swallowed vast sums of money, yet the European semiconductor industry, in international terms, is something of a joke. Too often, interventionism leads to the creation of national champions. They often have semi-monopolistic positions in their home markets, and the result is to divide up the overall market, leading to a plethora of national companies, very few of which are strong global competitors.
This, surely, is the story of intervention in Europe as a whole. Consider the electronics sector or even the car industry in Europe. Over the years, almost every European Government have played the game of subsidising, aiding and protecting their national car industries. National car industries, national steel industries and national electronics industries in Europe have fairly strong positions in their home markets, yet Europe as a whole has very few international players.
Above all, intervention and subsidies almost always lead to misallocated investment and wasted resources—resources that could better be employed elsewhere in the economy. Consider, for example, the huge sums of money and the huge amounts of skilled manpower that were invested in Britain's nuclear power programme in the 1950s and 1960s in an attempt to build an indigenous nuclear power capacity to rival that of the Americans. At the time, everyone knew that it would be cheaper to buy American technology. One must ask how much more good the vast resources and the investment in highly skilled manpower that went into that project could have done if market forces had directed them elsewhere in the economy.
Those are the reasons for the failure of interventionist policies. I urge hon. Members who may be inclined to point mistakenly to the supposed successes of interventionist policies in Japan to point, instead, to the failures of interventionism elsewhere. When I say that, I am not referring just to the eastern bloc. A sorry array of developing countries thought that the way to industrial and economic success was to have a centrally planned and controlled economy, with politicians, rather than business men, making the decisions. All those countries are now paying the price.
Consider the disastrous state of the Brazilian and Indian economies. Consider the way in which Brazil and India have tried to build indigenous computer companies, to develop space programmes and to engage in other types of nonsense. In those cases, the failure of interventionism is very stark. Having politicians make decisions that business men should be making leads to complete misallocation of resources, and that harms the overall economy.

Mr. Keith Mans: Does my hon. Friend agree that Brazil is now taking our route—reducing interventionism and encouraging foreign investment with no strings attached?

Mr. Oppenheim: My hon. Friend is right. I am full of admiration for President Collor and what he is trying to do in terms of liberalising the Brazilian economy, tearing down trade barriers—Brazil was one of the most protectionist countries in the world—encouraging foreign investment and the internal economy and privatisation. I am also full of admiration for the way in which he is combining that with a strong environmental policy aimed at maintaining the Amazon rain forest and looking after the rights of the Indians. Truly, President Collor is a great man, but he is struggling with all the vested interests and all the heavy baggage of Brazil's industrial and economic history. Looking at Brazil's present position, I fear that his plan may fail, simply because the burden of the past is far too great. I wish him the best of luck, and I certainly hope that he will succeed.
My hon. Friend's intervention came at an opportune time. I was just about to say that, bearing in mind the almost indecent haste with which central planning is being abandoned all over the world—not just in the eastern bloc, but in countries such as Brazil and even, to an extent, India —the Opposition might finally have got the message and might have dropped their predilection for interventionist policies and industrial strategies. That is not to say that there are not lessons to be learnt from countries like Japan and Germany, which are sometimes wrongly held up as being interventionist paradises. There are lessons to be drawn from Japan and Germany. However, the contention that those countries have succeeded as a result of interventionist policies is simply wrong.
Certainly there is plenty that Governments can do to help their economies. For one thing, both Japan and Germany have excellent, although not expensive, education systems. Clearly, in this country we have much to do to gear our education system more closely to the needs of industry. That is something that the Government can do. On the surface, it appears that Labour have grasped how crucial to the economy is a successful edcucation system. However, their answer is simply to throw more money at education. That ignores the fact that the Japanese spend less per pupil than we do, yet their results are far better.

Mr. Robert B. Jones: Does my hon. Friend agree that the education system in Germany reflects what we started to have—technical schools, grammar schools, and so on—and that that is precisely what Labour, when in power, have tried by every means to eradicate?

Mr. Oppenheim: My hon. Friend makes a very good point. Indeed, the parallel could be extended to Japan.


Germany and Japan both have two-tier education systems and there is no in-built bias against vocational education such as one so often encounters in this country. In academic circles there is no snobbery regarding vocational education. There are, of course, other reasons for the success of German and Japanese education. One is the concentration on literacy in science and maths, and another is that children there work 42 to 50 per cent. longer hours than do children here. We can learn many lessons from their highly successful education systems.
The point that I was making is that throwing more money at education, in an attempt to gear it better to our economic system, is unlikely to succeed. That ignores the fact that the least successful education authorities—least successful in terms of results—are those that spend the most money. Incidentally, all those are Labour-controlled. I do not see how appointing peace studies inspectors, or keeping one quarter of total funds back for central administration, or packing school governing bodies with political supporters of the local council, all of whom have an innate hostility to industry, or having economics teachers who preach the supremacy of socialism, is the way to gear our education system to the needs of industry.
Another lesson that we can learn from the Japanese and the Germans is that public spending must rise in line with what the nation can afford, and that encouraging savings is a good way to bear down on over-consumption and inflation and, at the same time, help to provide a pool of capital for industry. Unfortunately, everything in Labour's policies—from the investment income surcharge to the encouragement of high-spending, low-performance, left-wing education authorities—demonstrates that they have not yet grasped this fundamental truth.
The Opposition spokesman claimed that his opposition to the privatisation of BTG was to a large extent based on the need to retain a Government-run research base in Britain. I contend—although I accept that this is not a very fashionable view—that lack of research is not our problem. It is worth remembering that Britain is still a net exporter of industrial technology licences. Japan and Germany, on the other hand, are still net importers of industrial technology licences. We need not so much to improve our research and development as to improve our production and marketing capabilities. The best research and development in the world does not do much good if one cannot produce the goods properly and get them to the market effectively.
Here again, we can learn lessons from the Japanese experience. It is worth remembering that in the early years of Japan's industrial development, the Japanese were major purchasers of industrial licences. That was often sneered at as being simply copying, but it helped the Japanese to develop extremely fast. It also allowed them to concentrate more of their resources on production and marketing. Of course, as Japan became more powerful as an economy in the 1960s and 1970s, it moved on from simply copying or reproducing western products to improving those products, and in the 1980s, as it became the leading economy, it started to innovate far more and to conduct far more of its own research.
The same happened in the United States. In the early phase of industrial development in the 19th century, it was sneered at by the British as being a mere copier, but the Americans, in turn, moved from being mere copiers to

being improvers, and eventually became great innovators —and now, in their turn, they sneer at the Japanese as copiers.
The cycle of economic development for nations in terms of technology and research goes from copying to improving and then to innovating. It is natural for an economy at the top of the scale to innovate. For an economy such as Britain's, which is trying to grope its way back to some sort of industrial respectability after many decades of abject decline, it is important to spend more of its resources on improving manufacturing and marketing rather than on basic research, much of which, historically, has been exploited by other countries because our manufacturing production and marketing capabilities have not been as strong as they should have been, despite some major improvements in the past decade.
Far more important than a state-sponsored research body is to encourage industry to look further afield and be more prepared to buy in licences from abroad and be more open-minded about buying in technology from overseas. The "not made here" attitude that has characterised much of British industry since the war and led industry to be less than open-minded about foreign technology has done our industry a great deal of damage and shows that the need for a state-run research body is extremely dubious.
The Opposition spokesman said that he would not renationalise BTG if Labour came into office. If that is the case, why do the Opposition oppose its privatisation? I believe that this is part of a sorry charade of inconsistency by the Opposition. They have opposed every privatisation programme put before the House by the Government. Yet companies such as Amersham International, Rolls-Royce and British Airways have proved that they can be far more effective international competitors in the private sector.

Mr. Robert G. Hughes: Surely there is no mystery about why the Labour party is opposing this measure, as it has opposed every other privatisation measure. The reason was made clear in a statement by the hon. Member for Dagenham (Mr. Gould). On BBC's "On the Record" on 17 September 1989, he said that the Labour party is against all privatisations because they provide for the element of private profit-making. That has always been the basis of its position. Presumably the Labour party is against anyone making any profits out of anything.

Mr. Oppenheim: There seems to be a dichotomy in the Opposition's attitude. They are always telling us that our industry must do better and that they believe in manufacturing, but there is still an inbuilt bias in the attitude of many Opposition spokesmen—not all, since some of them have come on recently—against profit, which they equate with greed and crude materialism. It emanates from their view that human nature is perfectible and that anyone who moves away from their idea of the perfect society should be discouraged and kept down. They seem to believe that politicians and civil servants should make all the decisions.
The Labour party should look at successful economies such as Germany and Japan where there is no inbuilt hostility to money-making, business, commerce and profit. They do not have the outdated 19th-century attitudes that still permeate the British Labour party.
As I said, the Opposition have opposed every privatisation measure, but companies such as Amersham


International, Ross-Royce and British Airways have proved that they can be more effective in the international marketplace when freed from the control of politicians and civil servants. None of those companies has asked to go back into state ownership. All over the world, countries are not nationalising their industries but privatising them. They are not increasing state intervention in industry, but reducing it. It is sad that the Opposition spokesman and Opposition Members in general have not yet learnt that fundamental lesson.

Mr. Simon Hughes: If I were an employee, perhaps an engineer, of the British Technology Group listening to the debate, I would think that there was a great philosophical political debate going on above the head of my organisation. The hon. Member for Amber Valley (Mr. Oppenheim) made some perfectly valid and pertinent points about comparison between us and Japan and Germany, and so on. However, we are not talking about just another public sector industry. We are not talking about the steel industry, the coal industry or a company such as Cable and Wireless which, as part of the manufacturing sector, happened to be in public ownership. We are talking about a unique institution which, to use the words available to every hon. Member in the first sentence of the note provided by the House of Commons research staff, is the world's leading technology transfer organisation.
BTG is one of the bodies created intentionally by the Government as an amalgamation of organisations in the public sector to do a specific job. BTG's job is to be a bridge between science, learning and invention and manufacturing, production and economic success. The argument about whether it should be in the public or private sector does no justice to the correct analysis of the role and function of BTG which is that it is there to provide a particular form of assistance so that the private sector can do its job properly. It is there so that science and invention can pass on, through a group of people with expertise, the ability to make us successful, whether we sell our licences to this country or abroad. Therefore, the great polemical debate is out of place.
I hold no brief for a general renationalisation or public ownership programme that may or may not be advanced by the Labour party at the next election. My hon. and learned Friend the Member for Montgomery (Mr. Carlile) and I, together with all our other colleagues, do not have a partisan public/private sector view. We do not have a dogmatic view about whether things are better in the public or private sector since this depends on all sorts of circumstances. We are not against the idea that the market place is usually the best way for corporate enterprise to succeed. However, we are talking today about a different and unique body. If we focus our attention on the nature of BTG, we can begin to address its concerns and the concerns of many others about its future if it takes the path that the Government have charted for it in the Bill.
The Minister prayed in aid the support for privatisation of the senior management of BTG against the wishes of the majority of its work force. The parallel that suggested itself to me was the recent example of the popularity among a small minority of people in certain sections of the health

service for self-government of hospitals within the national health service, against the view of the majority of the work force who would rather the hospitals remained integrated as part of the local district health authority.
I understand that there may be a view within the management of BTG which says, "We think that we can go out into the big wide world and, because we are already profitable and successful, we can go on being more profitable and successful." However, there are other considerations which I hope that the Ministers will address. To be honest, I have not heard them adequately addressed yet. I was sad about the Minister for Corporate Affairs' speech. He is capable of making an intelligent and cerebral speech, but he made a party political knockabout speech, which belittled his intelligence and the importance of the issue.
The first matter—I shall be brief because this was dealt with by my hon. and learned Friend the Member for Montgomery and in exchanges across the Floor—is that the Government have not come clean about the advice that they have been given. It appears that the advice that they have been given internally is in favour of keeping BTG in the public sector.
It also appears from the partial consultative exercise with the universities, that they also do not want a privatised BTG in the form envisaged by the Government. The Under-Secretary quoted the majority view of the universities and the Committee of Vice-Chancellors and Principals. A majority of them wanted BTG to continue as a private foundation or trust—as a special body in which they conjointly had an interest and which would act as the technology arm to which their research activities could be linked. The universities did not argue for the wholesale divorce of BTG by letting it go off into the private sector sea to be bounced around and bought and sold by whoever came along under whatever conditions were imposed, let alone while we have not heard of those conditions because the Government have no idea about them.
Next, the hon. Member for Amber Valley considered whether we should tie up significant public funds in an organisation that could function equally well in the private sector. He knows—as does anybody else who has considered the issue—that we are not talking about large amounts of public sector funding or about the Government pouring enormous sums into this particular pit, let alone into a bottomless, non-profit-making pit which is a drain on the economy.
It is exactly the reverse. BTG's total income last year was £29·5 million. The operating profit after tax was just short of £7 million. Of course there is a drain if it must pay off a certain amount to the Government. It has to pay a significant amount and that may be an argument for changing that relationship. The £6 million which is siphoned off may be able to be put to better use, but that is not an argument for saying that it is a big drain when looked at as a whole or that it is a loss-making enterprise. It is not. It is successful and we are talking about relatively small amounts of money if we consider the public exchequer expenditure overall.
If we bear that in mind, the argument should not be whether to cast off BTG and let it go unprotected into the private sector or whether it stays where it is. We could properly debate alternative models for BTG. Certainly, my colleagues and I would not argue against that approach, although there are certain criteria that must be fulfilled before we would be happy about any new model.
The Government have commissioned a study, the conclusions of which they have not shared with us, so this is a debate in the dark. We conclude, therefore, that the reason that BTG is on the agenda is that it has been spotted as a remaining public sector enterprise about which the Government have a straightforward and dogmatic view. That is the only justification.
The right hon. Member for Morley and Leeds, South (Mr. Rees) is, coincidentally, a constituent of mine and a near neighbour of the BTG's headquarters at the Elephant. He has an interest in this debate and I shall be brief in order to allow him to catch your eye, Mr. Deputy Speaker. He asked one of the most pertinent questions: how do we know that the new regime will guarantee the three Is that he identified, of which I shall mention just two —the integrity, and independence of the enterprise that the BTG has been? We are worried that Britain will lose a resource which is currently so successful because it has the confidence of scientists and of inventors. Those people can go in confidence to BTG knowing that their ideas will be respected and not be at risk of being exploited or put into the private sector without the protection that they seek.
The danger of the loss of independence is that the supply of ideas and inventions will cease. That is obvious. If the new regime does not have the same integrity and if scientists and inventors do not believe in it as a body in the scientific and research technology world, they will not use it. They will not supply the ideas and inventions as they have in the past.
The BTG is trusted not to disclose ideas to other people. It is trusted not to pinch ideas and to pretend that they belong to someone else or to sell them at a profit. It is trusted to give a good technical assessment of an idea. It is trusted to ensure that the procedure for licensing the technology will work and will be carried out effectively.
As BTG is in the public sector, there can be no conflict of interest. In the private sector, there is bound to be such a conflict. Yesterday for the first time I visited, relatively privately, one of the private hospitals that have sprung up in my constituency. It is opposite Guy's hospital. It is important to see what is happening. The private sector must have a conflict of interest about where it takes its patients from or what it does to maximise its profits, because it is a profit-making enterprise. If a body is in the private sector and has a profit-making motive, there will be conflicts of interest—whether to maximise profits or to maximise investment and research, and we risk losing the technological advantages that BTG has had.
Will people have the same confidence in a profit-orientated private sector company that they currently have in a commercial but non-profit orientated company which is in the public sector and seen to be accountable to Parliament? Clearly one must at least be sceptical, and the probable answer is no.
Another concern is that there is a special relationship between BTG and the science funding organisations, as mentioned by the hon. Member for Bedfordshire, North (Sir T. Skeet). The logic of his intervention would be to privatise the research councils. There would be no merit in keeping any agency close to Government to ensure that activities of scientific research and of technological importance were carried out. I heard the rather unusual view of the hon. Member for Amber Valley that Britain should reduce the amount of its research, not increase it.

Mr. Oppenheim: No.

Mr. Hughes: I listened carefully. He argued that we should concentrate on manufacturing and production rather than on funding research which is then used abroad. I am not against concentrating on manufacturing and production, in which we have been weak, but I dissent strongly from the view that we can afford to reduce the amount of research carried out in Britain, let alone non-private-sector-led research.
One of the greatest problems that the scientific research community continually bemoans is the fact that scientific research in Britain is too demand led by the private sector and that there is too little blue sky research. Pure research is now at a premium in terms of funding. We risk creating the same problem in the context of technology that we already have in purely scientific research. This is a problem which we should address now rather than bemoan later.
Another of the merits of an organisation such as BTG has been that it has been a long-term institution. It has supported people for two, four, six, eight, or 10 years to develop their ideas to fruition. Sometimes a good idea can take eight or 10 years before it generates profits and may need experts working together to support it from its original concept to exploitation. In the private sector, the danger would be that long-term, difficult ventures would not be supported. The private sector would go for short-term profits. There would be no guarantee of long-termism. Additionally, all the factors that have been built up as a support—the additional education given to researchers in BTG, the benefit of a cross-relationship between people from different disciplines working together in a sort of technological hothouse—are at risk of being lost.
The real threat to BTG is that the Government would take a dogmatic view if the Bill were passed. Parliament would enable it to be sold. We would have no guarantee that we should retain close to the Government or to the public sector anybody at all to be accountable to Parliament and to carry on the work which, according to any record or assessment, has been extraordinarily successful. Why on earth are we running the risk of throwing away what has proved itself an eminently successful, complementary part of Britain's industrial, technological and scientific activity in the past 20 or 30 years?
There have been many failures in industrial terms, but BTG has not been one of them. It has been one of our successes and it has brought about many of our successes. It seems folly to throw away a proven success for a future that is, at best, extremely uncertain.

Dr. Keith Hampson: I am in something of a dilemma. I appreciate the arguments put so effectively by many of my hon. Friends, and I apologise to a couple of them whose contributions I missed—especially my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), whose approach, I suspect, is similar to mine.
On the one hand, it seems to me to be eminent good sense to privatise BTG. We have heard from a number of hon. Members just how unnecessary many of the bureaucratic regulations are. It seems quite unnecessary, for example, that BTG should have to go to Ministers in respect of certain levels of investment and to have its appointments approved. Also unnecessary is the general


involvement of Government officials in scrutinising BTG and so on. BTG should simply be getting on with making sound academic and commercial judgments.
On the other hand, Opposition Members—and, I suspect, my hon. Friend the Member for Bedfordshire, North—have made valid points about the national interest. Collectively, Britain has been under-investing in research—I stress the word "research". I fully accept the central point of my hon. Friend the Member for Amber Valley (Mr. Oppenheim) that, in many respects, there is no point in researching unless one can develop products from one's research. Nevertheless, the research itself is fundamental.
As the hon. Member for Southwark and Bermondsey (Mr. Hughes) pointed out, one must strike a balance between blue sky research and research that is directly industry-driven. That balance was skewed the wrong way, and the Government have rightly tried to swing it back to ensure that there is more industry-related research. There is a huge investment at stake, and in the past we were simply not using our talents as well as we should have been in the generation of products. We have an unrivalled Nobel-prize-winning record, yet many of the breakthroughs that we were achieving were being developed elsewhere—notably in Japan.
The Government have established various means of getting the higher education institutions and research establishments to relate more closely to industry and to discover what industry wants. The LINK initiative immediately springs to mind. We have also encouraged universities to develop science parks. Moreover, as I said in an earlier intervention, most universities now have their own company structure through which to try to exploit their research efforts and patents and that has been very valuable. But we cannot swing the balance wholly in favour of near-market research. There is still a vital need for blue sky research—research driven by the exigencies of the research programme and the ideas of those pursuing it which, throughout our history, has thrown up breakthroughs that are directly relevant to product development that no one initially foresaw.
We have under-invested in relation to our major competitors—notably the Japanese and Americans. A high percentage of our research investment is geared to the military—a consideration that the Japanese do not have. In large measure because of the short-termism of the City's outlook, British industry has shown an unwillingness to invest in its own plant and research facilities, just as it under-invests in training. Since the war, we have had a history of economic cycles and, in periods of downturn, when management rightly have to cut their overheads, the two first victims tend to be training and research.
As a result, whereas we have remained fairly static in terms of civil research investment, our competitors have steadily moved ahead. One can look for figures that approximate our research effort to those of our competitors and compare percentages of GDP, but even in those terms the gap is widening. Our economy has not done terribly well; percentages of GDP hide the real truth —that, in absolute terms, the amount of cash that we invest is much smaller than that invested by Japan, the United States and even Germany.
That problem must somehow be addressed. The Japanese and the Americans are trying to establish increased collaboration between the academic, higher education and research worlds and companies. The promotion of such collaboration was precisely the role conceived for BTG—or its predecessor body—which was to act as a sort of academic broker. When the group was first launched—at a time when there was a shortage of all the other initiatives to which I have referred—it was the only body that was pretty close to industry and knew some of the directions in which industrialists wished to develop products. The group could scour the higher education markets to find out where research was being done and then establish the extent to which potential development from it was possible.
Most of our major competitors do that in one way or another. The Japanese economy is driven by huge corporations which are ruthlessly competitive, even within the electronics and car industries. Nevertheless, when the Select Committee on which I have the pleasure to serve went to Japan to look at the information technology industry, we found that, in all sorts of different ways—some direct and some indirect—the Japanese Ministry of International Trade and Industry encouraged pre-competitive research effort and collaboration. In the light of that, the United States has had to encourage its companies to engage in pre-competitive research collaboration.
The decision to privatise BTG does not mean that there is not a need for Government, industry and research establishments to work together under partnership arrangements that enable them to make the best use of the limited investment available. On the other hand, Opposition Members are to prone to confuse mission and ownership. I remember vividly our arguments about the polytechnics. For more than a dozen years, I argued that polytechnics should be removed from local authority control and made part of our national investment in higher education. We heard the parrot cry from Opposition Members that the distinct mission of the polytechnics was to relate closely to their local communities and to serve the requirements of local commerce and industry. Opposition Members said that the polytechnics should be owned by the local community—in other words, the council.
That is nonsense and has been shown to be nonsense. Universities, which were not owned by councils, engaged in distinctive local community activities and served local industry. Leeds university is an example. Moreover, since the polytechnics have been removed from councils' control, they have continued to be geared primarily to the local community. There is no reason at all why BTG should not continue to be the academic broker that it has always been. The academic community has trusted BTG with its ideas in the past. Why should it not continue to do so? It is conceivable that one of the options that the Government will consider is a management buy-out. If that happens, BTG will have the same people, and largely the same approach, and it should command the same trust.
The brokerage role is very important, but it could be even more important. I would expect the BTG in the private sector not just to tap the brilliance of our own research effort but to open itself to a wider range of partnerships, enabling it to tap into research elsewhere in the world.
I do not know whether hon. Members mentioned the two notable examples during my absence from the


Chamber. Because the BTG is a state corporation, it was prohibited from having access to French research endeavours. The French Government did not want the British Government to get their hands on projects that they were funding. As we all know, there was an attempt to establish a joint venture agreement with a Spanish company to tap in to research there. That was exactly what should have been done. British industry should have access to the research effort worldwide. The Spanish Cabinet became involved in the negotiations, and the whole thing fell flat.
There are perfectly sound reasons why the brokerage role could be even greater and more successful for Great Britain Ltd. if BTG were privatised, provided that it is not sacrificed on the anvil of total free market forces and, as soon as it is privatised, a large predator does not come along with the narrow, short-termist thinking which prevails so often in the City. It could buy it up and then either wipe it out of existence or divert it into some other international conglomerate's interest. That predator could be a Japanese bank. It has already been said that BTG should not become locked into a particular part of its activities. For example, the group has a wide range of connections and partnership arrangements with the pharmaceutical industry. Clearly it would be wrong for one company to be allowed to buy up the group.
I finish with this plea. We must examine the options for the privatisation format—a trade sale, a management buy-out, or a consortium, which was mentioned earlier. I should like to know exactly what a consortium would entail. I foresee that the best solution would be to put the group in the private sector, with strict guarantees for all academics who have patents with it already, so that the present arrangements are not at risk.
There should be guarantees that the present relationship, partnership and trust with the academic world will remain, so that exploitation and transfer of technology can continue. We could also consider a Government golden share, at least for a short time, so that the trust can be maintained and people abroad can see that the group is not vulnerable to immediate takeover by predators. French and German companies, for example, or the German Government could then believe that we had a respected body which was not Government-owned but was Government-protected. Companies or Governments would then be more ready to participate in collaborative efforts on research initiatives. If we can establish a framework which gives those guarantees, the university world, the industrial world and Britain as a whole will benefit.

Dr. Lewis Moonie: I have listened with great interest to the speeches of Opposition Members this afternoon. The hon. and learned Member for Montgomery (Mr. Carlile), the hon. Member for Southwark and Bermondsey (Mr. Hughes) and my hon. Friend the Member for Glasgow, Central (Mr. Watson) made thoughtful speeches, which added to the opening remarks of my hon. Friend the Member for Dunfermline, East (Mr. Brown) many questions which the Government must answer. I shall pass mercifully over most of the speeches made from the Conservative Benches. Words

such as "banal" flitted through my mind as I listened to them, but perhaps it would be more merciful not to allocate the term to any individual.
Yesterday I read an interesting snippet in one of the newspapers. It gave a quote from a Conservative Member of the European Parliament, Lord O'Hagan. He referred to "Calibans of the intellect" on the right wing of his party. Until I heard the Minister's speech today, I wondered exactly what Lord O'Hagan had in mind, but it is all much clearer now.
The Government have presented a pretty thin case for privatisation. We can see why the Secretary of State conveniently chose not to introduce the Bill, but to absent himself from the premises. Clearly, one debate this month with my hon. Friend the Member for Dunfermline, East was enough for him.
Instead of using the generous time available to him to present a coherent case, the Minister for Corporate Affairs spent his time largely on childish abuse. In doing so, he gained no respect for his superficial and flippant attitude to a serious issue.
As today's debate draws to a close, it is worth taking a few moments to reflect on the statutory function of the British Technology Group, as laid down in the Development of Inventions Act 1967. They are:

"(a) securing, where the public interest so requires, the development or exploitation of inventions resulting from public research…
(b) acquiring, holding, disposing of and granting rights (whether gratuitously or for consideration) in connection with inventions resulting from public research…
(c) promoting and assisting, where the public interest so requires, research for satisfying specific practical requirements brought to the knowledge of the Corporation, where they are of opinion that the research is likely to lead to an invention; and
(d) assisting, where the public interest so requires, the continuation of research where it appears to the Corporation that the research has resulted in any discovery such that the continuation may lead to inventions of practical importance."

Those four points outline the importance of the national interest in the debate today, an importance which was not properly touched on by the Government. Assuming that those remain the key objectives of the British Technology Group, it is surely up to Ministers to show why those objectives would be better served in the private sector and how they propose to safeguard them. The comments made so far have sadly been of little help.
For example, in the interview with The Observer to which my hon. Friend referred, the Secretary of State said:
The bureaucratic constraints which inevitably impose themselves on statutory bodies are preventing BTG from achieving its full potential. The Government's objectives are to ensure that more, and stronger links are forged between industry and science.
What bureaucratic constraints cannot be removed? How will privatisation of BTG strengthen links between industry and science?
Sadly, the substitution of dogmatic assertion for clear argument is all too typical of Ministers today. That is why they have failed to convince anyone of the necessity for or the validity of privatisation. They have failed to convince the vast majority of the staff of BTG. They have failed to convince inventors, whose patents are handled by BTG. They have failed to convince eminent scientists working in research. They have failed to convince financial observers. I refer the Minister for Corporate Affairs to comments made when privatisation was first mooted two years ago to


back up the assertion that privatisation was necessary. They have certainly failed to convince, and in this instance also failed to consult, the vice-chancellors and principals of the universities.
The Government have even failed to convince their own advisers. Despite their reticence, we know that Ministers were advised in 1988 that BTG would be better left in the public sector. That is why they have refused to publish any part of the report. It was not because of any issue of commercial sensitivity or anything else: it was merely that the conclusions of the report are inconvenient to Ministers. How, otherwise, can it be right to privatise now, when venture capital is scarce, rather than two years ago, when it was still plentiful?
It is not as if the alternative of a private company has not been tried before by the Government. In the mid-1980s, the then Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine), impatient with what he regarded as the inefficiency of BTG in the public sector, set up Defence Technology Enterprises to capitalise on innovatory ideas in his field. The money was provided, somewhat reluctantly, partly by BTG and partly by private institutions. The company came back to the funders for more money a year later. It came back again a year after that. By that time, BTG had had enough and said, "No thanks, we are not putting up any more money."
Two years after it had been set up, Defence Technology Enterprises folded, unable to cope with the twin problems of under-capitalisation and the demand from City investors for an immediate return on their money. Is that what the Government have in mind today for the British Technology Group?
I wish briefly to recap on the reasons why we oppose the sale of BTG. We do not believe that the traditional arguments which the Government advance in favour of privatisation hold in this case. There will be no extension of share ownership. The shares are worth only about £35 million, assuming that the Government abstract the £20 million-worth of working capital which BTG must retain in order to function. I can hardly see the Government selling that off. Little revenue will accrue to the Treasury. The costs of the sale are already substantial and are likely to go up still further. Opportunities for competition after privatisation are likely to decrease rather than increase. There is not the slightest justification for the sale on grounds of efficiency, because BTG is already highly profitable in the public sector.
It is in the national interest to have a public sector body to take responsibility for developing ideas from publicly financed universities and polytechnics. It has a crucial role, as it allows a long-term view of projects to be taken. The sale of BTG represents the Government's abandonment of one of the few examples of long-term thinking within their Administration—BTG will be abandoned to a market that acts as though it is unaware of the meaning of that phrase.
BTG owns a stock of 8,500 patents, and the cost of renaming them will be enormous—again, a waste of money. It regularly takes legal action against people who infringe its patents, but that may not necessarily be true of a private company that is constrained by the demands of its shareholders for a return on their investment.
Perhaps the most important reason for opposing privatisation now is the one that made the Government

refrain from privatising two years ago—the many conflicts of interest and problems that will beset the Government when they try to sell the company. Those problems were highlighted in the report to the Government by their advisers. I am certain that no sensible person would be in favour of a single large company being given the go-ahead to buy BTG, although some might be attracted by that idea. There is nothing in the Bill to suggest that the Government have found a way out of their dilemma.
I have listened in vain for the slightest logical justification for the proposed privatisation of BTG. That absence has led me to the inescapable conclusion that, once again, dogma has triumphed over reason, prejudice over good sense.
It is no accident that BTG has flourished in the public sector. The translation of new ideas into successful products and techniques is a long, hard process beset by disappointment and frustration. That task needs patience and the ability to see beyond the next quarter's figures or the next year's dividend.
A consideration of the range of products and inventions with which BTG is now presently associated gives one some idea of the hard task undertaken by it. In science, it is considering assays of blood constituents and the production of monoclonal antibodies. In materials technology, one of the key areas of development today, it is considering the production of high-performance plastic fibres. It is also involved with the development of advanced semiconductors. Its pharmaceutical work includes the development of anti-cancer drugs, various pain killers and the therapeutic use of monoclonal antibodies. BTG is also responsible for a wide range of potentially beneficial products in engineering and electronics.
A long-term approach is sadly lacking in most sectors of British industry. Perhaps I have a biased view, as I worked for several years for the pharmaceutical industry, which is the best exponent of such an approach.

Sir Trevor Skeet: Glaxo, Smith and Nephew, and Beecham are in the private sector. If such companies can undertake such long-term work—the hon. Gentleman has already acknowledged that—why not put BTG in the private sector as well?

Dr. Moonie: Obviously Conservative Members have no idea what early technology transfer is about, so it is difficult to convince them of the difficulties of operating in such work. BTG undertakes much of its work before there is any evidence that a specific product is likely to be successful. It takes out patents in no secure knowledge that there will be a return on them. It must look 10 or 15 years ahead.
The pharmaceutical industry may undertake such long-term work, but pharmaceuticals represent just one sector of BTG work, which covers every area of invention. I do not want to repeat myself, but I have already cited the number of sectors in which BTG is involved. I do not believe that researchers or other companies would be happy if a company owned by another pharmaceutical firm, however reputable, took over their ideas and developed them. Those other companies would have taken leave of their senses if they welcomed such a change; that is why so many of them are opposed to BTG going into the


private sector. It should remain where it has carried out its job efficiently and well for many years—it should remain in the public sector.
By privatising BTG, the Government have confirmed that they are incapable of seeing the value to our nation of such an asset. I hope that, on reflection, they will think again. The privatisation of BTG is being carried out merely for privatisation's sake, despite the damage that that will cause to British industry, science and technology. That is why we shall oppose the Bill.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): Let me deal with the essence of the debate: should BTG be privatised? Should it operate fully within the stimulus and realities of market conditions, or should it be used as an instrument of state intervention?
The hon. Member for Kirkcaldy (Dr. Moonie) should know that Britain's total research and development effort amounts to £6·9 billion spent by industry and £4·5 billion spent by the Government. A total of £11·4 billion is spent on research and development. Last year, the research spend of polytechnics and colleges amounted to £1·5 billion, while BTG's spend on projects and patents was a mere £11 million. The House should set the debate in proper context—BTG spends £11 million, while the value of total research effort in this country is equivalent to more than £11 billion. Those figures suggest that BTG's contribution amounts to less than one tenth of 1 per cent. of total United Kingdom spend on research and development and less then 1 per cent. of the moneys available to its traditional inventive resources—

Mr. Watson: Why the fuss to privatise BTG?

Mr. Leigh: It is the Opposition, not us, who are making the fuss.
BTG has a staff of just 188 and a turnover of £30 million a year and by most estimates it would rank as a small to medium-sized enterprise.
In 1985 BTG lost the right of first refusal of public sector inventions and with it inventors lost what they considered to be an implied right that BTG should exploit their inventions. Now the whole purpose of BTG is to turn inventions into profit. It is a commercial company.
The hon. and learned Member for Montgomery (Mr. Carlile) got it right—BTG is primarily a patent-creating mechanism to defend ideas in the increasingly predatory international marketplace. BTG chooses inventions and exploits the science base for one purpose only—profit. BTG, having chosen and patented a product, negotiates the sale and licences it with revenue-sharing agreements.
The hon. and learned Member for Montgomery made a characteristically frank and robust speech, but he should know that, by its very nature, the work of BTG is already commercial. It is already a commercial, profit-making enterprise, and it therefore sits uneasily and unnaturally within the statutory framework. The case for privatisation is as simple as that.
The hon. and learned Gentleman said that he generally favours privatisations, but the hon. Member for Southwark and Bermondsey (Mr. Hughes) was less sure. The case is simple—BTG is a profit-making, commercial operation, and there is simply no reason why it should not be privatised.
BTG's operating profits have averaged more than £4 million a year, rising to £6·8 million in 1989–90. It has been self-financing for more than 20 years and it is involved in 1,600 inventions, 8,500 patents and nearly 500 licences. BTG is a strong, indeed an obvious, candidate for privatisation. It is not surprising that the management of BTG has been pressing for privatisation for some time.
The hon. Member for Dunfermline, East (Mr. Brown) asked a question of my hon. Friend the Minister which my hon. Friend was unable to answer at the time. It related to an alleged publicity campaign concerned with privatisation. It is not surprising that my hon. Friend could not reply. First, BTG has its own public relations budget and Ministers in the Department of Trade and Industry are not consulted; secondly, it is merely a proposal from a public relations company to BTG and BTG has not yet adopted the campaign. So how my hon. Friend the Minister of State could be expected to know about it, I do not know. The hon. Member for Dunfermline, East made great play of that. What I have said is surely the end of it.
I can tell the hon. Member for Glasgow, Central (Mr. Watson) that management look forward to being freed from restrictions on its borrowing powers and obligations to submit approvals to the DTI. Also relevant is the inappropriateness of the domestic statutory duties laid on BTG decades ago and the direction which BTG wants to take on the international stage. Already BTG derives some 70 per cent. of its licence income from outside the United Kingdom, mainly from Japan, the United States and the European Community.
I welcome my right hon. Friend the Secretary of State back to the Chamber. He has just arrived back from India, where he was opening the largest ever trade fair there. BTG was exhibiting at that fair. No doubt the whole House was unimpressed by the carping remarks by some Opposition Members about my right hon. Friend.
Points about BTG's international involvement were made forcefully by my hon. Friends the Members for Bedfordshire, North (Sir T. Skeet) and for Amber Valley (Mr. Oppenheim). My hon. Friend the Member for Bedfordshire, North made a very pertinent point about BTG being unable to exploit a patent in Turkey.
Sir Colin Barker, BTG's chairman, heads a successful international profit-making organisation. He looks forward to BTG entering private life as an independent and integral organisation. I assure my hon. Friends the Members for Bedfordshire, North and for Leeds, North-West (Dr. Hampson) that we believe that our objective of privatising so as to maximise the net returns to the Exchequer, consistent with a good prospect of BTG's technology transfer activities continuing, is the correct way forward.
That objective provides the flexibility to accommodate the privatisation options of public flotation, private placing, trade sale, or management buy-out, and the involvement of any parties with potential interests, such as companies, universities, institutions and BTG's staff. It recognises the reality that the future of a privatised BTG must essentially be a matter for its new owner, management and staff.
I was delighted to read the comments of the hon. Member for Kirkcaldy in The Independent yesterday that a group of British universities was interested in taking over BTG, backed by money from investment funds. How pragmatic of him to enhance and advance the case of capitalism so publicly.

Dr. Moonie: rose—

Mr. Leigh: If the hon. Gentleman wishes to retract what was in The Independent, I shall give him the opportunity to do so.

Dr. Moonie: One possibility is that a group of universities, backed by money, might take it over. I do not at present have any knowledge of such a group. It would be wrong to leave the Minister with the impression that I do.

Mr. Leigh: Of course, it would be wrong for anyone to expect the Opposition spokesman to look at the matter with an open mind. One might think that there was nothing intrinsically wrong with the proposal that the hon. Gentleman was advocating in The Independent. Clearly, his knuckles have been rapped and he is beating a hasty retreat.
Privatisation of BTG would not in any way weaken the Government's policy on innovation. Although BTG makes a significant contribution to the United Kingdom's innovative performance, it has rightly not been given a special role in the Government's innovation policy support measures. For example, although BTG's prime focus is as an exploiter of the science base, it has no special role—I use those words carefully—in the LINK scheme for collaborative research between companies and higher education institutions. Nor has BTG any special role in my Department's support for technology transfer through regional technology centres and overseas missions. The absence of such a role for BTG is quite deliberate. I do not believe, and I am sure that the chairman of BTG would agree with me, that an organisation successfully operating within the commercial disciplines of BTG should also act as an instrument of Government support programmes.
The Opposition ask why there is a need to privatise BTG; cannot the same objective be achieved, they say, by removing the present statutory constraints? I am sure that, when hon. Members think carefully, they will agree that bodies in the public sector must have monitoring arrangements. Loosening constraints will not get around that requirement. It is not for Government to second-guess the commercial decisions of companies, which must subject themselves to the discipline of the marketplace.
The Opposition view is that these proposals are tantamount to tampering with BTG's business. They say that BTG fills a gap where the United Kingdom is weak—turning ideas into products. I stress that we are not tampering with BTG's business of turning ideas into marketable products. BTG's management believes that privatisation will afford it the opportunity to compete more effectively without bureaucratic constraints.
It has been suggested that privatisation will not bring new capital to BTG. I disagree. The United Kingdom has the advantage of being one of the largest and most sophisticated capital markets in the world. There has never been a problem in attracting capital for worthwhile investments.
It has also been suggested today that a privatised BTG would no longer be obliged to act in the public interest. Where the public interest coincides with commercial interest, there should be no problem. However, where the two diverge or are in conflict, it will be up to the management to act in the best commercial interests of the company.
It has been suggested that BTG's business is so inherently long-term and risky that it is impossible to pick winners, and that only a public sector organisation can carry out this function; but many private sector organisations look to the long term—for example, in the oil and pharmaceuticals industries, as my hon. Friend the Member for Amber Valley said—and any prospective purchaser of BTG will also be looking to the long term.
We have heard very little in the debate of the Labour party's plans for BTG. At the beginning of my few words, I said that we must set BTG in perspective, remembering that it spends about £11 million a year out of a total research effort of over £11 billion. From what we understand from its policy document, "Looking to the Future", it seems that the Labour party would give an enhanced role to BTG. That smacks of the old-fashioned dirigiste interventionist approach.
We did not hear from the hon. Member from Dunfermline, East one word about the old National Enterprise Board. The Bill abolishes the NEB. My hon. Friends may be surprised to learn that the NEB is still alive. It has been in long hibernation, no doubt awaiting the arrival of the hon. Member for Dunfermline, East to awaken it. He will not. The Bill kills it off. The powers of the NEB which remain on the statute book are frightening. It can borrow up to £750 million, it can form companies, it can buy shares and it can make acquisitions—[Interruption.] How significant that the Opposition now laugh about the NEB; how significant that they are no longer prepared to defend it. It is not surprising, given its history. Have they forgotten Chrysler, with £160 million poured into that company only for it to go bust within a couple of years? Have they forgotten Nexos, mentioned by my hon. Friend the Minister of State, which went into liquidation owing the taxpayer about £32 million? That is the history of the NEB.
The Opposition are not prepared to accept the resuscitation of the NEB, but they have various sons of NEB in view. They have the BTE, the NIB, the RDA and the LIC. These are only initials to my hon. Friends, but in the unlikely event of a Labour Government, the names would become all too familiar—a national investment bank and regional development associations. They are the same policies, repackaged and revamped. The Bill will abolish the NEB, and I commend it to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 275, Noes 198.

Division No. 63]
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AYES


Adley, Robert
Bennett, Nicholas (Pembroke)


Aitken, Jonathan
Benyon, W.


Alexander, Richard
Bevan, David Gilroy


Alison, Rt Hon Michael
Biffen, Rt Hon John


Allason, Rupert
Blackburn, Dr John G.


Amess, David
Blaker, Rt Hon Sir Peter


Arbuthnot, James
Bonsor, Sir Nicholas


Arnold, Sir Thomas
Boscawen, Hon Robert


Ashby, David
Boswell, Tim


Aspinwall, Jack
Bottomley, Peter


Atkins, Robert
Bottomley, Mrs Virginia


Atkinson, David
Bowden, A (Brighton K'pto'n)


Baker, Nicholas (Dorset N)
Bowden, Gerald (Dulwich)


Baldry, Tony
Bowis, John


Barnes, Mrs Rosie (Greenwich)
Braine, Rt Hon Sir Bernard


Batiste, Spencer
Brazier, Julian


Bellingham, Henry
Bright, Graham


Bendall, Vivian
Bruce, Ian (Dorset South)






Buchanan-Smith, Rt Hon Alick
Hill, James


Buck, Sir Antony
Hind, Kenneth


Burns, Simon
Hogg, Hon Douglas (Gr'th'm)


Butler, Chris
Hordern, Sir Peter


Butterfill, John
Howard, Rt Hon Michael


Carlisle, John, (Luton N)
Howarth, G. (Cannock &amp; B'wd)


Carlisle, Kenneth (Lincoln)
Howell, Rt Hon David (G'dford)


Carrington, Matthew
Howell, Ralph (North Norfolk)


Carttiss, Michael
Hughes, Robert G. (Harrow W)


Cash, William
Hunt, David (Wirral W)


Chapman, Sydney
Hunt, Sir John (Ravensbourne)


Chope, Christopher
Hunter, Andrew


Churchill, Mr
Hurd, Rt Hon Douglas


Clark, Rt Hon Alan (Plymouth)
Irvine, Michael


Clark, Dr Michael (Rochford)
Jack, Michael


Clark, Rt Hon Sir William
Janman, Tim


Colvin, Michael
Jessel, Toby


Conway, Derek
Johnson Smith, Sir Geoffrey


Coombs, Anthony (Wyre F'rest)
Jones, Gwilym (Cardiff N)


Coombs, Simon (Swindon)
Jones, Robert B (Herts W)


Couchman, James
Jopling, Rt Hon Michael


Cran, James
Kellett-Bowman, Dame Elaine


Critchley, Julian
Key, Robert


Currie, Mrs Edwina
King, Roger (B'ham N'thfield)


Curry, David
Knapman, Roger


Davies, Q. (Stamf'd &amp; Spald'g)
Knight, Greg (Derby North)


Day, Stephen
Knight, Dame Jill (Edgbaston)


Devlin, Tim
Knowles, Michael


Dicks, Terry
Knox, David


Dorrell, Stephen
Lang, Rt Hon Ian


Douglas-Hamilton, Lord James
Lawrence, Ivan


Dover, Den
Lee, John (Pendle)


Dunn, Bob
Leigh, Edward (Gainsbor'gh)


Durant, Sir Anthony
Lennox-Boyd, Hon Mark


Eggar, Tim
Lester, Jim (Broxtowe)


Evans, David (Welwyn Hatf'd)
Lilley, Peter


Evennett, David
Lloyd, Sir Ian (Havant)


Favell, Tony
Lloyd, Peter (Fareham)


Fenner, Dame Peggy
Lord, Michael


Field, Barry (Isle of Wight)
Luce, Rt Hon Sir Richard


Finsberg, Sir Geoffrey
Lyell, Rt Hon Sir Nicholas


Fishburn, John Dudley
MacGregor, Rt Hon John


Fookes, Dame Janet
MacKay, Andrew (E Berkshire)


Forman, Nigel
McLoughlin, Patrick


Forsyth, Michael (Stirling)
McNair-Wilson, Sir Michael


Fowler, Rt Hon Sir Norman
McNair-Wilson, Sir Patrick


Fox, Sir Marcus
Madel, David


Franks, Cecil
Malins, Humfrey


French, Douglas
Mans, Keith


Fry, Peter
Maples, John


Gale, Roger
Marland, Paul


Gardiner, Sir George
Marlow, Tony


Garel-Jones, Tristan
Marshall, John (Hendon S)


Gill, Christopher
Marshall, Sir Michael (Arundel)


Gilmour, Rt Hon Sir Ian
Martin, David (Portsmouth S)


Glyn, Dr Sir Alan
Maxwell-Hyslop, Robin


Goodhart, Sir Philip
Mayhew, Rt Hon Sir Patrick


Goodlad, Alastair
Mellor, Rt Hon David


Gorman, Mrs Teresa
Meyer, Sir Anthony


Grant, Sir Anthony (CambsSW)
Miller, Sir Hal


Greenway, Harry (Ealing N)
Miscampbell, Norman


Greenway, John (Ryedale)
Mitchell, Andrew (Gedling)


Gregory, Conal
Mitchell, Sir David


Griffiths, Sir Eldon (Bury St E')
Moate, Roger


Griffiths, Peter (Portsmouth N)
Monro, Sir Hector


Grist, Ian
Montgomery, Sir Fergus


Ground, Patrick
Moore, Rt Hon John


Grylls, Michael
Morrison, Sir Charles


Hague, William
Moss, Malcolm


Hamilton, Hon Archie (Epsom)
Neale, Sir Gerrard


Hamilton, Neil (Tatton)
Neubert, Sir Michael


Hampson, Dr Keith
Newton, Rt Hon Tony


Hannam, John
Nicholls, Patrick


Hargreaves, A. (B'ham H'll Gr')
Nicholson, David (Taunton)


Harris, David
Norris, Steve


Haselhurst, Alan
Onslow, Rt Hon Cranley


Hayhoe, Rt Hon Sir Barney
Oppenheim, Phillip


Hayward, Robert
Page, Richard


Heathcoat-Amory, David
Patnick, Irvine


Hicks, Robert (Cornwall SE)
Pawsey, James





Peacock, Mrs Elizabeth
Sumberg, David


Porter, David (Waveney)
Summerson, Hugo


Portillo, Michael
Tapsell, Sir Peter


Powell, William (Corby)
Taylor, Ian (Esher)


Raffan, Keith
Taylor, John M (Solihull)


Raison, Rt Hon Sir Timothy
Taylor, Teddy (S'end E)


Redwood, John
Tebbit, Rt Hon Norman


Rhodes James, Robert
Temple-Morris, Peter


Riddick, Graham
Thompson, D. (Calder Valley)


Ridley, Rt Hon Nicholas
Thompson, Patrick (Norwich N)


Ridsdale, Sir Julian
Thorne, Neil


Rifkind, Rt Hon Malcolm
Thornton, Malcolm


Roberts, Sir Wyn (Conwy)
Tracey, Richard


Roe, Mrs Marion
Tredinnick, David


Rossi, Sir Hugh
Trippier, David


Rost, Peter
Twinn, Dr Ian


Rowe, Andrew
Viggers, Peter


Rumbold, Rt Hon Mrs Angela
Wakeham, Rt Hon John


Ryder, Rt Hon Richard
Walden, George


Sackville, Hon Tom
Walker, Bill (T'side North)


Scott, Rt Hon Nicholas
Walker, Rt Hon P. (W'cester)


Shaw, David (Dover)
Waller, Gary


Shaw, Sir Giles (Pudsey)
Ward, John


Shaw, Sir Michael (Scarb')
Warren, Kenneth


Shelton, Sir William
Wells, Bowen


Shephard, Mrs G. (Norfolk SW)
Whitney, Ray


Shepherd, Colin (Hereford)
Widdecombe, Ann


Shepherd, Richard (Aldridge)
Wilkinson, John


Sims, Roger
Wilshire, David


Skeet, Sir Trevor
Winterton, Mrs Ann


Smith, Sir Dudley (Warwick)
Winterton, Nicholas


Speller, Tony
Wolfson, Mark


Spicer, Sir Jim (Dorset W)
Wood, Timothy


Spicer, Michael (S Worcs)
Woodcock, Dr. Mike


Stanbrook, Ivor
Yeo, Tim


Stanley, Rt Hon Sir John
Young, Sir George (Acton)


Steen, Anthony
Younger, Rt Hon George


Stevens, Lewis



Stewart, Allan (Eastwood)
Tellers for the Ayes:


Stewart, Andy (Sherwood)
Mr. Timothy Kirkhope and


Stewart, Rt Hon Ian (Herts N)
Mr. David Davis.


Stokes, Sir John



NOES


Adams, Mrs. Irene (Paisley, N.)
Cousins, Jim


Anderson, Donald
Cox, Tom


Archer, Rt Hon Peter
Crowther, Stan


Armstrong, Hilary
Cryer, Bob


Ashley, Rt Hon Jack
Cummings, John


Ashton, Joe
Cunliffe, Lawrence


Barnes, Harry (Derbyshire NE)
Cunningham, Dr John


Battle, John
Dalyell, Tam


Beckett, Margaret
Darling, Alistair


Benn, Rt Hon Tony
Davies, Rt Hon Denzil (Llanelli)


Bennett, A. F. (D'nt'n &amp; R'dish)
Davies, Ron (Caerphilly)


Benton, Joseph
Davis, Terry (B'ham Hodge H'I)


Bermingham, Gerald
Dewar, Donald


Bidwell, Sydney
Dixon, Don


Blair, Tony
Doran, Frank


Blunkett, David
Dunnachie, Jimmy


Boateng, Paul
Dunwoody, Hon Mrs Gwyneth


Boyes, Roland
Eadie, Alexander


Bradley, Keith
Eastham, Ken


Bray, Dr Jeremy
Evans, John (St Helens N)


Brown, Gordon (D'mline E)
Ewing, Harry (Falkirk E)


Brown, Nicholas (Newcastle E)
Fatchett, Derek


Brown, Ron (Edinburgh Leith)
Faulds, Andrew


Caborn, Richard
Fearn, Ronald


Callaghan, Jim
Field, Frank (Birkenhead)


Campbell, Menzies (Fife NE)
Fields, Terry (L'pool B G'n)


Campbell, Ron (Blyth Valley)
Flynn, Paul


Canavan, Dennis
Foot, Rt Hon Michael


Carlile, Alex (Mont'g)
Foster, Derek


Clarke, Tom (Monklands W)
Foulkes, George


Clelland, David
Fraser, John


Clwyd, Mrs Ann
Fyfe, Maria


Cohen, Harry
Galloway, George


Cook, Robin (Livingston)
Garrett, Ted (Wallsend)


Corbett, Robin
George, Bruce


Corbyn, Jeremy
Gilbert, Rt Hon Dr John






Golding, Mrs Llin
Morgan, Rhodri


Gordon, Mildred
Morley, Elliot


Gould, Bryan
Morris, Rt Hon A. (W'shawe)


Graham, Thomas
Morris, Rt Hon J. (Aberavon)


Grant, Bernie (Tottenham)
Mowlam, Marjorie


Griffiths, Nigel (Edinburgh S)
Mullin, Chris


Hardy, Peter
Murphy, Paul


Hattersley, Rt Hon Roy
Nellist, Dave


Heal, Mrs Sylvia
Oakes, Rt Hon Gordon


Healey, Rt Hon Denis
O'Brien, William


Henderson, Doug
O'Hara, Edward


Hinchliffe, David
O'Neill, Martin


Hoey, Ms Kate (Vauxhall)
Orme, Rt Hon Stanley


Howarth, George (Knowsley N)
Parry, Robert


Howell, Rt Hon D. (S'heath)
Patchett, Terry


Howells, Dr. Kim (Pontypridd)
Pendry, Tom


Hoyle, Doug
Pike, Peter L.


Hughes, John (Coventry NE)
Powell, Ray (Ogmore)


Hughes, Robert (Aberdeen N)
Prescott, John


Hughes, Roy (Newport E)
Primarolo, Dawn


Hughes, Simon (Southwark)
Quin, Ms Joyce


Illsley, Eric
Randall, Stuart


Ingram, Adam
Rees, Rt Hon Merlyn


Jones, Barry (Alyn &amp; Deeside)
Reid, Dr John


Jones, leuan (Ynys Môn)
Richardson, Jo


Jones, Martyn (Clwyd S W)
Robertson, George


Kaufman, Rt Hon Gerald
Robinson, Geoffrey


Kinnock, Rt Hon Neil
Rogers, Allan


Kirkwood, Archy
Rooker, Jeff


Lambie, David
Rooney, Terence


Leadbitter, Ted
Ross, Ernie (Dundee W)


Lestor, Joan (Eccles)
Rowlands, Ted


Lewis, Terry
Ruddock, Joan


Litherland, Robert
Salmond, Alex


Livingstone, Ken
Sheerman, Barry


Livsey, Richard
Shore, Rt Hon Peter


Lloyd, Tony (Stretford)
Short, Clare


Lofthouse, Geoffrey
Skinner, Dennis


Loyden, Eddie
Smith, Andrew (Oxford E)


McAllion, John
Smith, C. (Isl'ton &amp; F'bury)


McCartney, Ian
Smith, Rt Hon J. (Monk'ds E)


Macdonald, Calum A.
Snape, Peter


McKay, Allen (Barnsley West)
Soley, Clive


McKelvey, William
Spearing, Nigel


McLeish, Henry
Steinberg, Gerry


Maclennan, Robert
Stott, Roger


McMaster, Gordon
Strang, Gavin


McNamara, Kevin
Thompson, Jack (Wansbeck)


McWilliam, John
Turner, Dennis


Madden, Max
Vaz, Keith


Mahon, Mrs Alice
Walley, Joan


Marek, Dr John
Wardell, Gareth (Gower)


Marshall, David (Shettleston)
Wareing, Robert N.


Marshall, Jim (Leicester S)
Watson, Mike (Glasgow, C)


Martin, Michael J. (Springburn)
Williams, Rt Hon Alan


Martlew, Eric
Williams, Alan W. (Carm'then)


Maxton, John
Wilson, Brian


Meacher, Michael
Winnick, David


Meale, Alan
Wise, Mrs Audrey


Michael, Alun
Worthington, Tony


Michie, Bill (Sheffield Heeley)
Wray, Jimmy


Michie, Mrs Ray (Arg'l &amp; Bute)



Mitchell, Austin (G't Grimsby)
Tellers for the Noes:


Molyneaux, Rt Hon James
Mr. Thomas McAvoy and


Moonie, Dr Lewis
Mr. Frank Haynes.

Question accordingly agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).

British Railways (No. 2) Bill

Order for consideration, as amended, read.

Question proposed, That the Bill be now considered. —[The Chairman of Ways and Means.]

Sir Patrick McNair-Wilson: It may be for the convenience of the House if I remind hon. Members that the Bill received an unopposed Second Reading—[Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd): Will those hon. Members who are having a meeting by the doors, please do so on the other side?

Sir Patrick McNair-Wilson: I was reminding the House that the Bill received an unopposed Second Reading on 1 February 1990 and went to a Committee on Unopposed Bills on 2 May 1990. During its passage through that Committee, an amendment was made by the British Railways Board removing the works requirements at Bedford, and it is because of that amendment that this consideration stage is now taking place.
Several hon. Members put down blocking motions at various stages in the Bill's progress and I hope that we can now be satisfied that those hon. Members have had their problems dealt with. I refer particularly to my right hon. Friend the Member for Selby (Mr. Alison) who was concerned about the coal trains to the Drax power station. Assurances have now been given to the Selby district council that such heavy coal trains will not normally be routed via Selby.
That conveniently brings me to the point that will perhaps be raised by the hon. Member for Pontefract and Castleford (Mr. Lofthouse) if he catches your eye, Madam Deputy Speaker. He supports works 13 and 14 which affect his constituency.
The hon. Member for Huddersfield (Mr. Sheerman) expressed concern about works 6 and 7, the siding at Deighton, the ICI works. As far as I am aware, no problems about that now remain.
The hon. Member for Leicester, East (Mr. Vaz), whose name appears on the Order Paper today, is concerned about a piece of land in his constituency that has been sold to the local authority and requires fencing, about which he has had discussions with the board. I hope that the matter can be resolved speedily. I can give the hon. Gentleman the assurance that the board is anxious to reach a speedy conclusion, but, clearly, the local authority will have its part to play in that. It may be that the hon. Gentleman will catch your eye, Madam Deputy Speaker, and explain the matter further.
The Bill is one of a large number of British Rail Bills. On this occasion, the works outlined are broadly not contentious. It is part of the legislation that British Rail brings forward each year to modernise and improve services. It will play a significant part in removing freight from road to rail and in providing better access for commuters in the London area and in South Yorkshire.
The Bill must be seen in the context of the £3·5 billion which is due to be spent during the next three years, but it would be impossible to talk about British Rail at this time without mentioning the difficulties that some travellers have experienced. The snow has obviously caused problems not just for rail users, but for road users as well.
I am advised by the board that the Meteorological Office has informed it that there have been only four occasions in the past 30 years when there has been a fall of more than 6 in of dry powder snow of the type that we have experienced in the past week. In the 19 years between 1963 and 1982, there was effectively no snow at all. The board is shortly to send a team to Sweden to examine the operation of railways in extreme conditions, and it is hoped that, when its report is available, it will provide information that can be used in future.

Mr. Archy Kirkwood: Did the hon. Gentleman say that there has been no snow deeper than 6 in in the recent past? If so, will he delineate the geographical spread of that claim?

Sir Patrick McNair-Wilson: We are talking about the special type of snow—over 6 in of dry powder. The Meteorological Office has advised the board that only four times in the past 30 years has that snow fallen. I have no doubt that there is plenty of wet snow falling tonight outside the Palace, but the snow that caused the problems in the last week is comparatively rare. I know that the board has taken note of what the hon. Member has said.

Mr. Peter Bottomley: Many commuters in my constituency, and I am sure those in the constituency of my hon. Friend the Member for Beckenham (Sir P. Goodhart) will take the explanation that the snow is of a different type and one not normally seen in the constituency—

Madam Deputy Speaker: Order. The terms of the Bill are quite wide, but not wide enough to allow descriptions of the snow that we have had of late.

Sir Patrick McNair-Wilson: I shall move on immediately and obey your ruling, Madam Deputy Speaker.
Some 340 units on Network SouthEast have been damaged in this bad weather, and 130 traction motors have been replaced in the past 24 hours, but, overall, 50 per cent. of Network SouthEast operated normally this morning. The new Networker train has sealed motors, which will not be subject to the problems that I have outlined. Many of the new trains introduced by the board in recent years have never operated in serious snow conditions. Therefore, the problems relating to door operation and electrical circuits have not been experienced before.

Mr. Peter Bottomley: I shall try to stay in order. If the Bill helps, on those days when there is not a peculiar type of snow, to make services reliable, many of our constituents will be happy. The problem is that the excuse was used in the following days when there was no snow, and there were still no regular trains. I hope that the Bill will help.

Sir Patrick McNair-Wilson: If weaknesses exist in the design or manufacture of the units that have caused trouble, it will be for the manufacturers to put them right. British Rail is ensuring that all the lessons that can be learned are learned so that, by next winter, these problems will be behind us. I do not want to delay the House, because the Bill started with an unopposed Second Reading and went to an Unopposed Bill Committee. The works in the Bill are a small but significant contribution to

the revival of the railway system in Britain. I ask the House to approve the amendment made by the Committee and in due course to give the Bill its Third Reading.

Mr. Geoffrey Lofthouse: I support the Bill, because, for many years, there has been a problem in the small industrial town of Knottingley in my constituency. After the boundary commission report, Knottingley became part of my constituency. In the early days I found that it had a major problem. Some 120 coal trains went through the centre of the town, cutting it in half and travelling 5 m or 6 m from back doors.
The people in the town had complained about that problem for a long time. When a planning inquiry gave permission for the development of the Selby coalfield, people were dismayed to find that one of the conditions was that the coal must travel by rail. The most sensible thing would have been for British Rail and British Coal to get together to get the shortest route between the Selby coalfield and the Drax B power station, which was completed at about the same time. Given that, for 60 years, coal from Selby will travel to Drax B, the longer route through Knottingley will result in much greater expense. It would have been economically viable and attractive to both parties to have a shorter cross-country route.
I understand that there were problems and, as a result, coal travelling from Selby to Drax went through Knottingley. When I tell hon. Members that that was in addition to the 120 coal trains already going through the town, they will appreciate the problem. In many meetings, correspondence and other contacts with all the parties concerned, such as the West Yorkshire county council, the Central Electricity Generating Board and the Secretary of State, great sympathy was shown, because everybody could see the problem. Suggestions were made for either a direct route or a bypass through Knottingley.
Despite all the efforts, in an Adjournment debate that I had in 1984, the then Minister at the Department of Transport turned down the proposal for change because it would cost £4 million. Given the cost of the development of Selby coalfield and of building Drax, £4 million to solve the problem would have been but a drop in the ocean. Unfortunately, it was not to be and since then, apart from the 180 coal trains going 5 m or 6 m from back doors, 24 hours a day, there has also been the problem of the level crossings which are closed for 30 per cent. of the day. One can imagine the traffic problems that that causes.
My constituents are impatient about the delay in the Bill because the Bill will alleviate their problems. British Rail is not getting much praise today, but it has attempted to solve the problem. If the Bill is agreed to, and British Rail carries out the works 13, 13A, 14 and 14A, a substantial amount of the traffic will no longer go through the centre of Nottingley, and none will go through at night. I recognise that hon. Members have a right to block Bills for genuine reasons, but the House will appreciate why my constituents, who do not understand the workings of the House, cannot understand why Parliament has been blocking a Bill that would help them. I hope that the House will pass the Bill, because if it does, my constituents will be most grateful.

Sir Philip Goodhart: My hon. Friend the Member for New Forest (Sir P. McNair-Wilson) has presented the Bill with his customary skill, but this is a terrible night for British Rail to put forward any Bill. My hon. Friend reminded us of the problems that so many of my constituents have faced in recent days. Normally the service from so many parts of my constituency to the centre of London is, to put it mildly, bad, but in the past five days it has too often been non-existent. It would be difficult to exaggerate the rage which so many commuters in my constituency feel about the way in which British Rail has tried to cope.
I am especially interested in part IV of the Bill, which deals with land and the purchase of land, because one of the curious phenomena of British Rail planning in recent times has been to find that it is proposing to move much of the freight from the industrial heartland of the country to the channel tunnel via the congested rail lines of southern London.
Many of my constituents have found that their properties are severely blighted by British Rail's plans. They are hoping that British Rail will propose better schemes for compensation. However when I looked at the provisions in part IV of the Bill, which relate to the purchase of land, I found that, far from improving compensation in clauses 32 and 36, British Rail is proposing to restrict the amount of money that it will have to pay out in certain cases.
Clearly this will not be the last British Rail Bill to come before us. I hope that in future Bills there will be adequate compensation clauses, because part IV of this Bill is far too restrictive. I am sorry to see it in the Bill.

Mr. Keith Vaz: I am grateful for the opportunity to speak in support of the motion that I have tabled opposing the Bill. I shall be brief, first, because the issues that I wish to raise can be dealt with briefly as they are simple matters, and secondly, because my hon. Friend the Member for West Bromwich, East (Mr. Snape) has informed me that tonight is his 49th birthday and that he needs to join the various street parties that are taking place in his home town.
My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) spoke to me before the debate. I listened carefully to his speech today, and I also know that the Bill has the support of a number of hon. Members on both sides of the House. When my hon. Friend told me that he had been struggling for 12 years to get some of the measures in the Bill into legislation, I felt that I could not be the person to prevent his constituents from benefiting from the Bill. However, having said that, I am sure that my hon. Friends and Conservative Members will not mind waiting a few moments to hear about the problems that the constituents of Leicester, East have had with the British Railways Board. My objection to the Bill is that it gives specific powers and duties to the British Railways Board, which I do not believe it will carry out properly, simply because it has not carried them out properly as they affect the citizens of Leicester and especially of Leicester, East.
My concern is a strip of land at the back of houses on Woodgreen walk in the west Humberstone area of my constituency. Some time ago there were no houses on that piece of land, but, as the housing needs of the city of

Leicester developed, it was decided to sell the estate, which became known as the Willow Park estate, to a firm of private developers, which established about 1,000 households there. It left the land abutting the railway line in the ownership of British Rail.
British Rail has specific duties and responsibilities set out in many statutes. One that I would bring to the attention of the House is section 68 of the Railways Clauses Consolidation Act 1845, which I understand has not been substantially amended. Those responsibilities and duties enable the board to protect the lives of those people who live in the vicinity of land that it owns. However British Rail has, in my view, wilfully and continually ignored its statutory responsibilities.
Before I was elected to this place, when I was the parliamentary candidate for Leicester, East and another stood in my place, I was contacted by residents of the Willow Park estate. In particular Margaret Taylor, who went onto become the lady mayoress of Leicester, Philip Currie and Peter Maxwell, who formed themselves into a local residents group. They were worried because, from the time that they had lived on Willow Park estate, British Rail had not only failed to maintain the land and clear it of the debris that people were dumping on it, but had also failed to ensure that fencing had been adequately repaired.
As a result, I started my correspondence with the chairman of the British Railways Board. As the House can see from the pile here, I have written many letters to the British Railways Board to try to resolve the matter. At that early stage, I wrote to the chairman and requested a meeting. Following my election as the Member of Parliament, I convened a meeting with local residents and wrote again to the British Railways Board.
I received replies from the board and from the local authority, Leicester city council, which showed that no one knew who owned that piece of land. Many months of procrastination followed. British Rail, the local authority and the previous developers denied ownership of the land. Eventually, with a great deal of effort and work, we discovered that British Rail owned the land, and I contacted the regional office in Birmingham. I told British Rail what I told officers I met recently—that in my view this piece of land was of no material value to British Rail. The answer to the problem of constant letters and telephone calls from the local Member of Parliament and the local authority and the answer to the problem of young children running on to the track—through holes in the fences which people had cut to enable them to get to work quicker across the track—was to hand over the land either to the local authority or to the local residents. It took many months to convince British Rail of the need for such a scheme.
Eventually, officers from Birmingham came to meet me and local residents at the Northfields neighbourhood centre, and agreed in principle to hand over the land. At that stage, being a large organisation, it wanted to maximise the value of the land and was talking in terms of selling it to local residents or to the local authority. I pointed out to British Rail that there was no point in doing so, because no one could develop the land and the local residents would be the only people to benefit from it. Therefore, British Rail agreed to a scheme that would enable local residents to take the piece of land abutting their gardens, leading directly up to the railway line. British Rail was proposing to give the land to local residents at the peppercorn price of £1 for each strip, which


I thought was reasonable, as did many residents. Many of them had said that that was all it was worth, as they were not proposing to develop it, and the land was of no value to the local authority or to British Rail.
Then the problems arose. British Rail said that the residents would have to pay the cost of conveyancing—although a large legal services agency supports British Rail, and although British Rail pays a considerable amount to private solicitors to enable it to promote Bills of this nature. I put the residents in touch with a local solicitor.
The costs, it appeared, would amount to £100 per resident; in addition, the residents would have to pay a land registry fee of £30 and a fee for the incorporation of their residents' association. British Rail was not prepared to deal with each owner individually, preferring to deal with a single organisation: that meant another £30.
Next came the problem of who was to pay the cost of maintaining the land and repairing the fences before the land was handed over. British Rail estimated the cost at £10,000. Initially—in all generosity—it was prepared to contribute £2,500, 25 per cent. of the cost of the works. That was despite the fact that British Rail owned the land and was statutorily responsible for the maintenance and repair of the fences.
British Rail then looked to Leicester city council and the residents to make up the £7,500 difference. In good faith, I approached the council and wrote to the director of property services, Terry Ward. I asked him whether the council was prepared to provide £7,500 to repair the land and do British Rail's job for it. The reply stated—rightly, in my view—that it was the board's responsibility and that the council would make no contribution to the cost of the maintenance of the land and the repair of the fences. I was not at all surprised.
I then wrote again to Sir Robert Reid, the chairman of the board, suggesting that the stance adopted by him and his officials was not reasonable—mainly because they were responsible for the work. In March 1990, a meeting was convened at Leicester station, where I met regional officers, the station master and others to try to resolve the problem. During the negotiations, British Rail raised the amount that it was prepared to spend from £2,500 to £5,000: during a half-hour meeting, it was able to find an extra £2,500. At that stage, however, it still refused adamantly to pay the £5,000 that was needed to put the land into a decent state before it was handed over to the residents.
Surely it is reasonable for local residents to expect British Rail and its board to fulfil their statutory responsibilities: if they own land and fences, surely they should ensure that the fences are in a state of repair and the land is cleared of debris. I say that because the land now represents a hazard.
For the past decade, in the summer, people have dumped debris that they do not particularly want to keep in their homes—newspapers, for instance; and, when I went to have a look, a fridge had been dumped there. Anything that people do not want to drop at the council dump, or that council refuse collectors will not take, is dumped at the back of Woodgreen walk.
As can be imagined—even in the weather that we are now experiencing—the area becomes very hot in the summer as a result of the dumping, and there is always the risk of a fire. It is impossible for the emergency services to reach the site, because it is blocked with debris that has

accumulated for a decade. Moreover, the fence puts local people at risk because there are holes in it: children, especially, can get onto the tracks and could be injured. When I visited the site with a British Rail official, a group of children were playing near the line, having got through the fence.
This represents an important test case, not only for the residents of Woodgreen walk but for residents of all homes that abut railway lines. As a legislator, I am not prepared to come here and vote through British Rail's legislation on the nod, when it has been seen to be completely incapable of fulfilling its proper responsibilities to the people of Woodgreen walk and the people of Leicester.
Everyone suddenly took a great interest in my problem when my name appeared above the motion asking for the Bill to be considered in six months' time—along with the names of the former leader of the Liberal party and others; they disappeared because they had other engagements, but courteously warned me that they could not be present. I was approached not only by Conservative Members, but by a Gentleman called Rufus. He seems to be some kind of liaison officer for the British Railways Board. He is a very courteous person; he wrote to me, but forgot to include my name in the letter. Clearly he has the letter on a word processor: whenever anyone tables a motion criticising British Rail, out pops the letter and Rufus signs it, forgetting to say who it is addressed to. There is no "Dear Mr. Vaz" or "Dear Sir"; it is a general letter saying, "I understand that you have put your name down to the motion. I should be very keen to discuss the matter with you."
I am sure that the board would be keen to discuss the matter with me—but why now? Why do legislators have to go to such extremes to protect their constituents? Why cannot British Rail come to Members of Parliament who have constituency problems and try to sort those problems out, without our having to delay the House by raising these matters?
British Rail has laid down a deadline—31 March 1991—for the completion of the process. It expects the residents to pay up to £300 to acquire a tiny strip of land at the end of their gardens, simply because it will not fulfil its statutory responsibilities.
I believe, in all honesty, that the way out of the problern —and the way in which to stop legislators having to take action of this kind—is for British Rail to come up with the additional money that is necessary for it to fulfil its obligations. If it did that and made a contribution to my constituents' legal costs—so that they would not have to pay up to £130 to take over something with which British Rail should be dealing—I should be satisfied, and I think that they would be as well.
If, however, British Rail fails to fulfil its statutory responsibilities, I will use every parliamentary device to ensure it does so and to bring to the House's attention when it seeks to pass such legislation that British Rail should be given no more powers until it is seen to be dealing with its responsibilities to the satisfaction of local people who pay such people as Rufus and the chairman of British Rail for the work they do.

Mr. Bob Cryer: In general terms, welcome the Bill. I should declare an interest: I have five £10 shares in the Keighley and Worth Valley light railway.


I was the founder of the Keighley and Worth Valley railway preservation society; I called the first meeting, and was chairman for 10 years. As the House will be only too keenly aware, no dividend has ever been paid on the shares, because the money goes back into ensuring that the railway provides one of the best preserved steam-operated services in the country. I thought that I should mention that to show that I have some experience of the operation of railways, having done most of the jobs connected with the operation of the five-mile branch line.
Clause 7 relates to a viaduct that formerly carried the Kirkburton branch railway over the Huddersfield broad canal. After a number of works have been carried out, the board will be relieved of the obligation to maintain the viaduct for the purposes of the 1863 Act. Does that mean that the board will be entitled to demolish the viaduct? Insufficient viaducts are carrying railways, their primary and true purpose. However, they form an important part of our landscape. That is recognised by the British Railways Board; its viaducts committee examines the merits of viaducts. The board accepts the onerous obligation of maintaining a limited number of viaducts in such a condition that they remain part of the landscape, even though they do not carry traffic. However, it seeks to discard others. Few commercial organisations retain discarded items of equipment, purely because they are liked by members of the public. I wonder, therefore, whether this viaduct is worthy of preservation, or whether the board intends to demolish it.
There is a fair amount of interest in these often magnificent structures. Their construction sometimes involved loss of life. They provide a reminder of what the former Prime Minister regarded as Victorian values. I am sure, therefore, that all those who sit on the Treasury Bench will want not Victorian values but Victorian monuments to be retained wherever possible. Clause 14 provides that the board shall install a new level crossing in the borough of Northampton. The board normally tries to avoid creating new level crossings. They impede traffic and are a nuisance both to the board and to traffic users. The board has to bear the maintenance costs. If, however, it believes that there should be a level crossing, one accepts its judgment.
According to subsection 3:
The Board may, subject to such requirements as the Secretary of State may from time to time lay down, provide, maintain and operate at or near the new level crossing such barriers, lights, traffic signs and automatic or other devices and appliances as may be approved by the Secretary of State.
There is no better form of supervision at level crossings than people. A number of accidents has resulted from the use of flashing lights. An infamous accident occurred at Nixon level crossing. A driver was transporting a transformer across a level crossing. Due to a hump on the level crossing, the transformer on the low loader ground to a halt. A locomotive train ran into the transformer, fortunately without doing much injury and there was no loss of life. If, however, that level crossing had been staffed, the accident would not have occurred.
On such minor railways as the Keighley and Worth Valley railway, level crossing gates, due to the light railway legislation, are linked to signals. That is not a requirement of the operating regulations laid down by the Department of Transport for such level crossings as that referred to in

clause 14(3). That is why I imagine the subsection is couched in such general terms. The Minister is no doubt listening attentively while reading a guide to the House of Commons.
The Department should reconsider that question. It is neither sensible nor safe to continue to say to British Rail, "Get rid of employees." That is what the Government have said, in a number of guises, to British Rail. Danger results from the removal of human supervision at level crossings. If there is no link between gate closures and signals, a hazard may result. That point should be borne in mind.
During this difficult weather there have been a number of train delays because of frozen sliding electrical doors. Trains of that design were introduced so that trains can be operated by one man. If the doors are electrically operated, no platform staff are required to make sure that they are closed before a train leaves the station. Manually operated doors are simpler and safer and can be operated simply and reliably in freezing weather. However, the Government have put pressure on British Rail to cut costs—mostly employees. Consequently, during inclement weather British Rail has great difficulty maintaining services.
The Bill is couched in wide terms. There have been a number of accidents at unmanned level crossings. I suspect that they are different from the kind of level crossing envisaged in clause 14(3). However, I hope that the promoter of the Bill will clarify the position. Unmanned level crossings have led to people going on to them and being involved in accidents. There is a telephone link to the nearest signal box, which may be some distance away. Telephone boxes have sometimes been vandalised. It is outrageous and wicked for anyone to vandalise such equipment and place people's lives in jeopardy.
Towards the end of 1990, there was a level crossing accident near Doncaster. The accident was not due to a vandalised telephone. A young woman and at least two children were, tragically, killed. My hon. Friend the Member for Jarrow (Mr. Dixon) has drawn my attention to an accident at Harrison Farm level crossing. A seven-year-old girl was knocked down and killed by a train on the main Newcastle-to-Sunderland railway line. The view of the people who live there and of the deeply saddened relatives is that either the crossing should be closed or that it should be staffed by someone. If a level crossing is much used, someone should be there.

The Minister for Shipping and Public Transport (Mr. Patrick McLoughlin): The hon. Gentleman said that the Doncaster accident happened on a level crossing. I should put on record the fact that it is a public right of way—a footpath. I am sure that he will accept that it is not a level crossing. I cannot comment on the case in the constituency of the hon. Member for Jarrow (Mr. Dixon).

Mr. Cryer: I am grateful to the Minister. Of course, a level crossing is just what the term implies. A device is fixed across the line to give people a level walk over the rails. I accept the Minister's differentiation—that this was a foot crossing, rather than a vehicle crossing—but the principle is the same.
The Minister may be interested to know that the Secretary of State will have received a letter about the sad accident at Harrison Farm crossing. I hope that the point I am making can be put clearly to British Rail. Where the


board is given powers to operate a crossing—as in clause 14(3)—the Government should give sympathetic consideration to the provision of staffed level crossings if there is the slightest danger of a reduction in safety arising from having flashing lights and barriers with no linkage between the level crossing gates and the signals.
Let me remind the Minister of the procedure that used to apply to all level crossings throughout the country. A key that was fastened to the gate had to slide into a lock when the gate was in the closed position across the railway, physically preventing access to the railway. In fact, there were two keys at each crossing—one at either gate. Both had to be inserted and turned before the home signal protecting the level crossing against railway traffic could be released and railway traffic could proceed past the level crossing. That was a pretty foolproof system.
There is no doubt that rail speeds are higher than they used to be. Electric trains and high-speed diesel electric trains run at higher average speeds than were prevalent in the days of steam operation. In addition, they do not produce as much noise as did steam-generated locomotives. Of course, that noise was a source of very great affection to many people. The exhaust beat from a three-cylinder Gresley Pacific locomotive—an A4 "Streak"—was music to many people's ears. But it was also a warning to people using level crossings. Modern trains are faster and more silent than their predecessors. I urge the Minister to convey to the Secretary of State and to the other Ministers in his Department that there is a very good case for ensuring the highest possible safety standards at level crossings. If that means providing British Rail with extra money to employ people, it will be money well spent.
I hope that this Bill will pass. It should result in the provision of extra facilities for British Rail. It authorises several additional works. I hope that it will facilitate a shift of traffic from roads to railways—something that all hon. Members, certainly those on the Opposition Benches, wish to see. Railways are inherently safer than roads. My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) made a specific point about railways being intrusive. By and large, railways are less intrusive than roads. Freight trains are less intrusive than the juggernauts that pass houses at close quarters 24 hours a day. I accept that my hon. Friend has a perfectly valid case, but that case has been met by British Rail. We want to ensure success for British Rail.

Mr. Lofthouse: I point out that the whole case has not been met, although a substantial part of it has. I should not like it to he thought that the entire problem has been solved.

Mr. Cryer: I am grateful for my hon. Friend's indication that the Bill goes some way towards solving the problem. It is a step in the right direction.
I hope that the Bill will turn out to be a tiny step in the direction of the regeneration of British Rail. It is the annual "odds and sods" Bill—the garnering together of all the bits and pieces of legislative authority that are needed. Let us hope that British Rail, by using that authority, will generate increased traffic and reduce the burden on our roads.

The Minister for Shipping and Public Transport (Mr. Patrick McLoughlin): It may be helpful if I intervene briefly to give the Government's view on this Bill. The hon. Member for Bradford, South (Mr. Cryer) was rather dismissive of my reading Dod's. In fact, 1 was reading for further background information. I was very interested to see that the hon. Gentleman has written two volumes on railways—one in 1969 and one in 1972. That may have been some time before he entered this House. Perhaps he would use his time well by providing us with volume 3 and perhaps even volume 4.
The Government have considered the contents of the Bill and have no objections in principle to the powers sought by the British Railways Board. So far as the Department is concerned, there are no points outstanding. It is for the promoters to persuade Parliament that the powers they seek are justified. There were two petitioners against the Bill, but those petitions have now been withdrawn. The Unopposed Bills Committee has allowed the Bill to proceed with amendments. Judging by the debate so far, I think that there is agreement to it on both sides of the Chamber.

Mr. Peter Snape: You will be relieved, Madam Deputy Speaker, that I do not intend to refer to the copious reference books in front of me. A glance at them makes me grateful that I did not have to be present for the winding-up speech in the last debate. Obviously, it was extremely complex.
As the Minister has said, general powers Bills are regular occurrences in this House. Such legislation provides British Rail with a valuable opportunity to make minor improvements up and down the country. I refer in particular to works No. 6 and No. 7. All of us who take an interest in these matters will be pleased to see a switch of freight from road to rail. All too often these days, the reverse happens.
I congratulate my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) on being able to get some way along the route of diverting trains away from his constituency. This is something for which he has campaigned for a considerable time. I hope that his partial success will be followed by complete success in the years to come.
I was interested in the contribution of my hon. Friend the Member for Leicester, East (Mr. Vaz). I am grateful to him for his birthday wishes. I know that this has not yet happened to you, Madam Deputy Speaker, but when one reaches one's 49th birthday, one appreciates it if people do not remind others of the event.
My hon. Friend made a very wide-ranging case. His was a splendid piece of advocacy. If I followed the gist of his comments, the projects about which he complained are not covered by this Bill. However, I understand that, under our procedures, he was quite entitled to raise them. He seems to be of the opinion that British Rail should not only sell land at a nominal price but also tidy it up, fence it, and pay the legal costs of his constituents. As I have said, it was a splendid piece of advocacy.
Some of us think that, if British Rail were to be so generous, it might find the money to run the trains in accordance with the timetables. I am thinking in particular of services between Birmingham and London over the past


few weeks. My hon. Friend's splendid advocacy will have been heard, and perhaps it will be acted upon by those who are in a position to make such decisions.
My hon. Friend the Member for Bradford, South (Mr. Cryer) referred to the viaduct involved in works No. 6 and No. 7 and to level crossings. I hope that he will agree that British Rail has an onerous burden in maintaining many of these facilities, especially those on railway lines that are no longer being used, or are sparsely used. The Government and the Department must consider how best this financial burden might be lifted from the shoulders of British Rail, so that it might be able to do what, at least in theory, it is supposed to do—run passenger services in accordance with timetables.
The House will be grateful to the hon. Member for New Forest (Sir P. NcNair-Wilson) for presenting the Bill in his usual able manner. He spoke about the difficulties that British Rail—particularly Network SouthEast—is suffering now. All too often in debates about railway matters, we end up with anecdotes being swapped from one side of the House to the other, and we do not get very far that way. There is something wrong with a system under which, four days after a major fall of snow, Network South East can still run only 50 per cent. of its booked trains. At the risk of delving into my anecdotal memories, 34 years ago when I first started to work for British Rail—a railway of steam locomotives and paraffin lamps in the signals—passenger train cancellations were virtually unheard of. In the modern and updated system that we have now, they are a daily occurrence in virtually every part of the country.
The hon. Member for New Forest told us, eloquently if not convincingly, that 334 units are out of service because of the type and quality of the snow that fell last week. That is difficult to believe. We need a Government concerned to provide a proper railway service rather than to cut year after year the money available to operate it. We need a management capable of running trains rather than budgets. Managerial prospects now appear to depend exclusively on remaining within a budget laid down by someone else and not on providing satisfaction to the passengers, or customers, or whatever they like to call us poor unfortunates who wait for a considerable time for a train that does not arrive, even when it is shown on a timetable. All too often the timetables appear to be a figment of someone's imagination.
The Labour party officially welcomes the proposals in the general powers Bill. We welcome anything that helps the railway industry. I hope that the hon. Member for New Forest will be back, perhaps later this year, with the British Rail (No. 3) Bill, bringing forward all the necessary improvements that, for various reasons, have not made it into this Bill.

Sir Patrick McNair-Wilson: With the leave of the House, I should like to refer to some of the points that have been made. I thank the hon. Member for West Bromwich, East (Mr. Snape) for his support on this occasion, as on others. I know that he has the railway system very much at heart. I congratulate him and wish him many happy returns of the day.
I thank the hon. Member for Pontefract and Castleford (Mr. Lofthouse) for the warm welcome that he gave to the works about which he spoke so eloquently. I hope that they will provide the relief for his constituents that I know he has been seeking for so long.
My hon. Friend the Member for Beckenham (Sir P. Goodheart) dealt with the problems of commuters. My hon. Friend will recall that I previously had the honour to be the Member for Lewisham, West, which shares the same railway system as his constituents have to use. I can assure him that British Rail is as unhappy as his constituents are about the difficulties that have been forced upon it during the past week. As I said earlier, a team is going to Sweden to look at harsh weather performance and other matters to ensure that, in future winters, we do not have the same problems.
My hon. Friend the Member for Beckenham referred to part IV of the Bill, dealing with the purchase of land, and talked about the channel tunnel. He will know that no route has yet been agreed. That may be causing all the problems of blight in the south of London to which he referred. The terms and conditions set out in part IV relate to the works in this Bill. I can assure him that, were we to move to the stage to which he referred—the channel tunnel link in any form—clearly we would be looking at separate terms and conditions of purchase.
The hon. Member for Leicester, East (Mr. Vaz), who is not in his place at the moment, spoke eloquently about the problems of his constituents. He will realise that British Rail will stand by the assurance I gave earlier in the debate. I hope that the matters to which he referred can be resolved speedily.
As has already been pointed out, the hon. Member for Bradford, South (Mr. Cryer) is an acknowledged expert on the railway system. He referred to clauses 7 and 14. On clause 7, the intention is to use the viaduct because it is related to the Deighton siding to which I referred earlier. On clause 14, the hon. Gentleman will know with his experience of these Bills, that, as is pointed out in subsection 3, safety is a matter for the Secretary of State. The Secretary of State has to give his approval for the board to provide, maintain and operate barriers, lights, signs and other devices and appliances. Clearly, the board wants to be free to introduce the latest technology as and when it is available. However, ultimately it is for the Secretary of State to determine that those matters lead to greater safety. I agree entirely with what he said about safety, and I can assure him—I am sure that he knows already—that, for the board, safety is the absolute No. 1 priority.
This has been a useful debate. The Bill started modestly enough, with an unopposed Second Reading, and I hope that, having dealt, I hope satisfactorily, with some of the points that have been made, and judging from the general support that the Bill appears to enjoy in the House, it can now proceed to a Third Reading.

Question put and agreed to.

Bill, as amended, considered accordingly; to be read the Third time.

HEATHROW EXPRESS RAILWAY (No. 2) BILL (By Order.)

Order for Second Reading read.

Motion made, and Question proposed, That the Bill be now read a Second time.—[Mr. Neil Thorne.]

Question put and agreed to.

Bill referred to the Examiners of Petitions for Private Bills.

British Technology Group Bill [Money]

Queen's Recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act resulting from the British Technology Group Bill, it is expedient to authorise—

(a) the payment out of money provided by Parliament of—

(i) any expenses incurred by the Treasury or the Secretary of State in acquiring securities of the successor company (within the meaning of that Act) or rights to subscribe for any such securities; and
(ii) any administrative expenses incurred by the Secretary of State or the Treasury in consequence of the provisions of that Act;

(b) the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans to the successor company;
(c) payments into the Consolidated Fund or the National Loans Fund.—[Mr. Boswell.]

Mr. Bob Cryer: There has been a gap between the Second Reading debate and this money resolution. Before the Minister mentions my absence from the Chamber during the Second Reading debate, I should tell him that I was chairing the Joint Committee on Statutory Instruments. It is not a glamorous job, but it has to be done, and it takes me out of the Chamber for a couple of hours every Tuesday afternoon from 4.30 pm. Therefore, I apologise for not being here during the bulk of the debate, but, as the Minister knows, I was here for the Front-Bench replies, so I am familiar with the arguments used.
The money resolution provides, in the usual form, for covering expenses—one cannot cavil at that. It relates to administrative expenses in addition to expenses involved in acquiring securities of the successor company. However, the second part of the resolution causes me some concern, because it authorises
the payment out of the National Loans Fund of any sums required by the Secretary of State for making loans to the successor company".
The successor company is the replacement for the British Technology Group. When the Minister spoke, he had that fanatical gleam that comes to the eyes of any Members of the no-turning-back or goose-stepping tendency in the Conservative party. We have seen on previous privatisation occasions how the rules of probity and good sense that normally govern the operation of our government are cast to the wind.
I want to suggest to the Minister a possible scenario. Let us consider a contributor to the Conservative party, such as Lord Hanson, who at one time was put forward to buy at least one of the generating companies that are now being offered to the public. It was hoped that he would get the Government off the hook in that area of privatisation. Let us suppose that a Tory party sympathiser comes along and says, "I am very willing to take up the purchase of the British Technology Group." Arrangements are then made to privatise it, and the most influential purchaser of shares in the company is Lord Hanson. What is to stop the Minister expressing his appreciation of that by making loans to the company? He could not do that when it was not a Crown company, but there is a time before full privatisation when the Secretary of State has control of the company and can make loans under clause 8(3). He can lay down conditions and require that the loan


shall be repaid to him as such time and by such methods, and interest on it shall be paid to him as such rate and at such time, as he may, with the consent of the Treasury, from time to time direct.
That is a pretty wide power to give the Secretary of State, and it is included in the primary legislation. I am not talking about his producing any delegated powers of any rules subject to approval by the House.
All that is saving us from handing over loans at preferential rates of interest to a company that it is arranged is about to be bought by an influential figure in the City scene—or whomever it may be—is the consent of the Treasury. It is rather alarming that, in the money resolution, we are handing over such powers in a process that I regard as wholly lamentable and which is in the hands of Ministers who are deeply committed not only to privatisation, but to privatisation on the basis that the process will not be subject to the criticism of hon. Members. Those Ministers need to make the process as successful as they can.
One of the ways in which Ministers can make the transfer successful is to ensure that the company is given all the loan money that it needs from the public purse. This will not be the first time that that has happened. Rover was an example of a privatisation in which a firm with assets of more than £750 million was handed over to British Aerospace at a cost of about £150 million. Lord Young, who was then Secretary of State for Trade and Industry, was criticised by the European Commission for the sweeteners that he allowed to be given to British Aerospace and which were not revealed to the public at large in the privatisation. This is a matter of considerable alarm.
My hon. Friend will recall that Lord Macmillan talked about selling off the family silver. We are now getting on to the peripheral pieces of family silver about which most people do not know. We are going into the attic. However, in this attic there is a highly successful group, as has been acknowledged by everyone. All the privatisation proposals have involved organisations that have been widely praised by the Government for the devotion and determination of the workers involved. Yet the Government thrust them out into what is euphemistically termed the "marketplace".
We know that the marketplace is not the never-never land that is so loved by the Minister. We know that it involves deals and arrangements between people who are in influential positions because they have a lot of money. If the Government seek to make this privatisation successful, they will want to make substantial loans. The money resolution and the components of the Bill provide that power. There are few safeguards in the Bill or in the money resolution to restrict what the Government can do.
It is alarming that the Minister, who has a reputation for extreme right-wing zeal, and the Secretary of State, who is part of the No Turning Back group and who is

another little zealot in the Government machine, are ready to hand over large sums of taxpayers' money. What will happen? We shall be too late. The money resolution and the primary legislation will have been passed. The whole thing is to be handed over with a veneer of legality.
However, we know that the process is designed to ensure not the reasonable loans that are needed but large sums to be handed over to a privatised company. The Government will then proclaim, "This is a success of privatisation." We know that it is a public success in every sense. The Government take a public organisation that has been successful and they then take public funds to provide further loans from the national loans fund to guarantee some sort of success.
I raise those points in perturbation. I tend to examine money resolutions. It is not a convention to vote on those resolutions, although I think that it should be. I should like to vote on them more often, because the money is the key to the whole business. We have passed the primary legislation which authorises the Government to provide money. The money resolution is a specific control by Parliament so that we can say to Ministers, "You have got the power to do this." I should like to withhold that power. I wait with eagerness to see whether the Minister, with the zealot's gleam in his eye, provides a satisfactory explanation or whether he simply provides the defensive briefing on money resolutions with which, I am delighted to say, most Ministers are now provided because money resolutions tend to be debated more frequently these days. I look forward to the Minister's comments.

The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Edward Leigh): We always enjoy the contributions of the hon. Member for Bradford, South (Mr. Cryer) on money resolutions. It is true that I have come prepared for the comments that I thought that the hon. Gentleman might make. He had some fun, but I will not follow him down that road.
The essence of the hon. Gentleman's remarks was a technical point concerned with the national loans fund and with lending to the successor company under clause 8. If I understood the gist of what the hon. Gentleman said, he seemed to suggest that the money might be misused.

Mr. Cryer: Making excessive loans.

Mr. Leigh: I think that I can give him the reassurance that he needs about excessive loans. The Secretary of State is empowered only to lend money to the successor company from the national loans fund while it remains wholly Government owned. That is merely a contingency measure in case privatisation is delayed. I hope that I can also reassure the hon. Gentleman by saying that it will be a condition of any such loans that they are repaid in full before privatisation. I think that that answers the hon. Gentleman's point.

Question put and agreed to.

Namibia Bill [Lords]

Considered in Committee; reported, without amendment.

Motion made, and Question proposed, That the Bill be now read the Third time.[Mr. Lennox-Boyd.]

Mrs. Ann Clwyd: Before I give my support to the Bill on Third Reading, let me ask the Minister one or two questions following our Second Reading debate last week.
In her reply to that debate, the Minister for Overseas Development talked about Walvis bay. Do the Government envisage the "early" reintegration of Walvis bay into Namibia taking place before the end of this year? Will Namibia's 12 offshore islands be included, and what sort of encouragement—the Minister's word—will the Government bring to bear on South Africa to relinquish its invalid territorial claim to Walvis bay?
What did the Minister for Overseas Development mean when she said that the Government would help the Namibian Government to tackle the problem of inherited debt, estimated at 800 million rand, which South Africa illegally imposed on the country before independence? Surely in international law the debt belongs to the South African reserve bank which, in turn, owes Namibia a large sum of accumulated foreign currency. Will the Minister support in principle the renunciation of the entire illegal debt?
We appreciate that development projects in education, agriculture and fisheries take time to plan, but does the Minister agree that the Government have been a bit slow off the mark—especially in agriculture and fisheries, given that other countries are already helping to drill bore holes, dig wells, train coastguards, provide seed and research fish stocks?

Mr. Deputy Speaker (Sir Paul Dean): Order. I hesitate to interrupt the hon. Lady, but we had a fairly wide-ranging debate on Second Reading, and we are now on Third Reading. Hon. Members must direct their remarks to what is in the Bill. I am finding it slightly difficult to understand how the hon. Lady's present remarks can be related to what is in the Bill.

Mrs. Clwyd: I appreciate that point, Mr. Deputy Speaker, and I am bringing my remarks to a close.
Namibia is now a Commonwealth country and the Bill reinforces its status as such. The present situation is an example of what could happen elsewhere in southern Africa. Will the Minister therefore explain why, over the next three years, the Government are to provide only about a quarter of the bilateral aid that is to be provided by Sweden, and far less than many other countries are providing?
Given that the most organised part of the Government's aid to Namibia so far is in military and police training, it is not good enough to say that all police forces should operate on the basis of full respect for human rights and the law. Hon. Members asked last week for the assurance that training will have a specific human rights component. Will the Minister now assure us that that will be the case?
I have several other questions, Mr. Deputy Speaker, but I will not strain your considerable patience tonight, as

we had a full debate last week. Nevertheless, I should be grateful if the Minister would respond more fully to my questions when he has an opportunity.

Mr. Nicholas Winterton: I apologise to you, Mr. Deputy Speaker, to the occupants of the Treasury Bench, to the House and to the Government arid people of Namibia for not having attended the whole of the Second Reading debate last week. I was present for most of the winding-up speeches, but unfortunately until then was engaged on other commitments elsewhere in the House.
I warmly welcome the Bill. Some hon. Members will know that for almost all my 20 years in the House, I have taken a great interest in Namibia, which is a wonderful country. I do not hesitate to say that, if I was not a citizen of the United Kingdom, there is no other country in which I should like to live more than in Namibia—or South-West Africa, as it was known.
I have had the privilege of visiting that country on many occasions. I must say that the new Government of Namibia would not have been the Government of my choosing. I would much have preferred it had the Democratic Turnhaller Alliance won the election, but SWAPO and its allies won it fairly and squarely and I believe that they stand a chance of forging a multi-party democracy in that country which will stand the rest of Africa in good stead for the future. All of us watch Namibia with great interest.
The hon. Member for Cynon Valley (Mrs. Clwyd) referred to the debt that the new Government inevitably inherited from the Administration that preceded them. I hope that the United Kingdom Government, the EC and other countries will seek to ensure that the fragile body of democracy which is Namibia will not have a millstone round its neck in the form of the large debt that it inherited. I repeat that I have visited Namibia many times; I have been to north, south, east and west. The infrastructure that has been built up is amazing. It is probably one of the best in the African continent. To that extent, the new Administration, under President Nujoma, have a good legacy on which to build for the future. But we do not want them to be handicapped and restricted by the heavy debt incurred by the previous Administration and so prevented from doing what is necessary to ensure their country's prosperity.
I go a little wide, Mr. Deputy Speaker, because the Bill has gone through the House extremely quickly. I do not believe that the admission of a new country to the British Commonwealth should go through on the nod, without those who have some knowledge of that country contributing to the debate and wishing it well. I hope that Namibia's immense potential can be used by its people.
Many hon. Members will know that the country comprises at least 11 different tribal groups, speaking 16 or more different languages. The Namibians have immense problems with education and the provision of educational equipment.

Mr. Deputy Speaker: Order. I must ask the hon. Gentleman, who is a member of the Chairman's Panel, to help me. I have already called the hon. Member for Cynon Valley (Mrs. Clwyd) to order. The occupant of the Chair


allowed a long debate on Second Reading. We are now on Third Reading and we must discuss what is in the Bill. I am sure that the hon. Gentleman will now do just that.

Mr. Winterton: Indeed I will. You have brought me to order, Mr. Deputy Speaker, and I shall certainly accede to your instruction.
I hope that Britain, as one of the leading countries of what was the British Commonwealth and is now simply the Commonwealth, will seek to play its part in ensuring the success of this fledgling country. Namibia has only 1·4 million people, but, as a member of the Commonwealth, it can take advantage of the immense wealth of good will and experience that is comprised in and can be obtained from the Commonwealth. I wish Namibia well. I wish its Government and its Opposition parties well. I hope that the country can set the example for the rest of Africa. I know that President de Klerk is doing his best in the Republic, but if there is success in African democracy—for that is what is important—there can be peace in that continent and Namibia can set the pace of reform and progress in the whole of southern Africa.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): This is a technical Bill to amend United Kingdom law to take account of Namibia's independence and membership of the Commonwealth. There have been debates both in this House and another place, not on the provisions of the Bill, which are largely uncontentious, but on the policy towards the newly independent Government of Namibia. Members of both Houses have had ample opportunity to express their opinions and I am happy to say that the debates have shown universal good will towards Namibia, a good will which was reiterated tonight by my hon. Friend the Member for Macclesfield (Mr. Winterton).
The hon. Member for Cynon Valley (Mrs. Clwyd) asked several questions, to which I shall reply briefly. If any elaboration is needed, I know that my right hon. Friend the Minister for Overseas Development will communicate with the hon. Lady.
As we have already said, we support the early integration of Walvis bay. In this context, "early" means as soon as practicable. It is for the Governments of South Africa and Namibia to determine the pace of negotiations. It is equally for them to determine the scope of any agreement and whether, for example, it would include the offshore islands presently administered with Walvis bay. As for encouragement, we have already emphasised in talks with the South Africans the importance of the talks to Namibia's prosperity. We believe that they will recognise the importance to the region and to themselves of an economically healthy Namibia and the key role of access to Walvis bay facilities.
The hon. Member for Cynon Valley also mentioned the inherited debt, which was referred to by my hon. Friend the Member for Macclesfield. My right hon. Friend the Minister for Overseas Development made it clear that Namibia is already providing in its 1990 budget for servicing and repayment of that debt. Namibia has not sought renunciation of the entire legal debt.
The hon. Lady asked several questions about aid. If I may, I shall draw them to the attention of my right hon. Friend the Minister for Overseas Development. I know that she will read the Hansard report of the debate. I shall ask her to provide the hon. Lady with answers in writing. Let us all hope that the immense potential of Namibia will be realised, to use the words of my hon. Friend the Member for Macclesfield. On that note, I am happy to commend the Bill to the House.

Question put and agreed to.

Bill read the Third time, and passed, without amendment.

OVERSEA SUPERANNUATION BILL [Money]

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act resulting from the Oversea Superannuation Bill, it is expedient to authorise—

(a) that payment out of money provided by Parliament of—

(i) any expenses incurred by a Minister of the Crown in consequence of any provision of the Act or of any scheme made or having effect as if made under section 2 of the Overseas Pensions Act 1973 by virtue of the Act;
(ii) any administrative expenses incurred by a Government department in consequence of the Act;
(iii) any increase attributable to the provisions of the Act in the sums payable out of such money under any other Act;

(b) the making of payments into the Consolidated Fund.[Mr. Boswell.]

STATUTORY INSTRUMENTS, &c.

LIGHTHOUSE AUTHORITIES

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &amp;c.).

That the draft General Lighthouse Authorities (Beacons: Hyperbolic Systems) Order 1990, which was laid before this House on 20th December, be approved.—[Mr. Boswell.]

Question agreed to.

UNFAIR DISMISSAL (COMPENSATION)

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &amp;c.).

That the draft Unfair Dismissal (Increase of Compensation Limit) Order 1991, which was laid before this House on 19th December, be approved.—[Mr. Boswell.]

Question agreed to.

UNFAIR DISMISSAL (AWARDS)

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &amp;c.).

That the draft Unfair Dismissal (Increase of Limits of Basic and Special Awards) Order 1991, which was laid before this House on 19th December, be approved.—[Mr. Boswell.]

Question agreed to.

EMPLOYMENT PROTECTION

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committee on Statutory Instruments, &amp;c.).

That the draft Employment Protection (Variation of Limits) Order 1991, which was laid before this House on 19th December, be approved.—[Mr. Boswell.]

Question agreed to.

House of Commons (Services)

Motion made, and Question proposed,
That Mr. Graham Bright and Mr. David Lightbown be discharged from the Select Committee on House of Commons (Services) and Mr. Anthony Steen and Mr. Greg Knight be added to the Committee.—[Mr. Boswell.]

Mrs. Maria Fyfe: I object to this item on the grounds that the Government have continually failed to set up a Select Committee to deal with Scottish affairs. Until they do, we shall continue to object to motions of this type.

Question put and agreed to.

The Gulf

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]

Mr. Tam Dalyell: My good fortune to begin an Adjournment debate at a quarter to 9 on the role of the United Nations in relation to the Gulf is tinged with just a little sadness. It is sadness that the House of Commons has allowed time to pass from 21 January, when the important questions that I am about to ask should have been asked. In the House of Commons to which I was first elected and of which the father of the Under-Secretary of State for Foreign and Commonwealth Affairs was a distinguished and powerful Member, those questions would have been asked not by a Back Bencher like me, but by Hugh Gaitskell from the Front Bench. These are major issues which belong to not an Adjournment debate but what should be a weekly major debate initiated by the Opposition party or the Government party in prime time.
Having said that, I should like to set some questions, talking quietly to the Minister, as we have the opportunity to do. The first is on the attitude to the United Nations of the Soviet Union. In his most recent statement, Mr. Gorbachev said:
The events in the region of the Persian Gulf are assuming an increasingly alarming and dramatic turn. The fly-wheel"—
the fly-wheel—
of one of the major wars of recent decades is spinning free. The number of casualties, including among the civilian population, is multiplying. The military activity has already caused enormous material damage. Whole countries—first Kuwait and now Iraq and later possibly others—are under the threat of catastrophic destruction. The discharge of a gigantic amount of oil into the Persian Gulf may turn into the gravest ecological disaster.
That is part of the latest Russian attitude.
The House will allow me one more quotation on the Russians. It comes from Mr. Brinkley's interview of Marshal Akhromeyev, the chief military adviser to President Gorbachev and the former Soviet chief of stall. Mr. Brinkley said:
'Mr. Gorbachev has said recently, and again yesterday, that the alliance forces are in danger of exceeding the UN mandate, which is simply to expel Iraqi forces from Kuwait. Is it your view, Marshall Akhromeyev, that by the tactics of comprehensive bombing in Iraq, the United States and its allies may be exceeding the UN mandate? And if so, what might the Soviet Union do about that?
Marshal Akhromeyev replied:
'You see, in life we sometimes come across such kind of situations. When a war has been started with just purposes, then it acquires a different kind of character.
I stress those words.
Something of this kind is taking place in the Gulf area today. Who knows?
The Government asserted that the American and British force—for such in reality it ever was and has certainly now become—had Russian backing; does it still have Russian backing? What assessment have the Goverment made of the Soviet position? I hear from several sources—there is no reason to suppose that the reports are in any way exaggerated—that men are walking from Tadzhikistan, Uzbekistan, Azarbaijan, Kazakhstan—Muslims from those southern Russian republics—to offer their services to Saddam Hussein. That is an ingredient of an extremely dangerous situation.
What is the Government's assessment of the Soviet attitude now that we are in week 4 of a military situation,


the nature of which, as in most wars, has changed from the start of that war? The events of 1915 were very different from those surrounding the murder of Archduke Franz Ferdinand. Wars take on a momentum of their own.
My second question, which is linked with the Russians, is about the Government's assessment of the bombing. My question is direct. Can the Minister point out to me whereabouts in the United Nations resolutions there is authority for the pounding of Baghdad night after night after night? There may be that authority, but I have not found it.
Bluntly, an increasing number of people, not only in Arabic and Islamic countries or in third-world countries, but in this country and thoughout the world, are embarrassed and unhappy—many are vomit-stricken—by what is happening. To think that those huge B52s leave that lovely Gloucestershire village of Fairford to go to drop their bombs—I do not know how accurately, except that Ramsey Clark makes it quite clear, as a former American Attorney-General, that the casualties are now mounting. Did the United Nations ever authorise that? Did it authorise the B52s?
What would the Minister or any of us here—my hon. Friends the Members for Bradford, South (Mr. Cryer), for Renfrew, West and Inverclyde (Mr. Graham), for Derbyshire, North-East (Mr. Barnes), for Pontefract and Castleford (Mr. Lofthouse), for Bradford, West (Mr. Madden), for Glasgow Maryhill (Mrs. Fyfe) and for Birmingham, Hodge Hill (Mr. Davis)—do if we were subject to such bombing? If I had been bombed last year or in any year from 1979, I would have "got right behind Margaret Thatcher". It is human reaction to get behind the leader of the country when one is being attacked.
What is the Government's assessment of the reaction to the bombing of Baghdad? I suspect that the people of Baghdad are reacting in the same way as all human beings react, as Londoners in this city reacted in 1940 and as the people of Hamburg reacted in 1943. The people of that proud Hanseatic city did not like the Nazis or Hitler at all, but during the bombing they stepped up production. I cannot say that production is going up in Baghdad, but I suspect that that bombing makes people more determined, not less.
What is the Government's assessment of the effects of such bombing? Furthermore, what is the effect on the troops who are bombed? We may say that we are concentrating all our bombing on Kuwait, but are we sure that that does not make the troops more determined? I fear very much for a land battle, because that battle could be another Stalingrad. It could be a battle of hand-to-hand fighting, block by block. Are we sure that the United Nations authorises that?
I am aware that we have some time for this debate, but my speech will not be endless. I have a specific question about the attitude of the United Nations Secretary General. I drew to the attention of the Foreign Office a report by Leonard Doyle from New York that appeared in The Independent on Monday 11 February under the banner headline "UN 'has no role in running war'". Forgive me, but I thought that we were acting as the United Nations force. That is what I have been told

endlessly by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). However, that report states:
The United Nations Security Council is not running the war in the Gulr—
who said that? —
according to Javier Perez de Cuellar, the Secretary-General.
It might be thought that he was in a position of some authority to pass comment on that.
Mr. Doyle reported that Mr. Perez de Cuellar
told The Independent at the weekend that the council had handed control to the US, Britain and France and only learnt the outcome of military actions after they had taken place.
If it is a United Nations war, it is a bit odd that the Secretary-General learned about military actions only after they had taken place. The report continues:
Distancing himself from allegations that the strategic objectives of the US and its allies go beyond the liberation of Kuwait, Mr. Perez de Cuellar said he could not say whether particular military actions, like the sustained and massive bombing of Iraq's infra-structure, were consistent with the United Nations resolutions.
We are entitled to ask, do the Government think that they are consistent with the United Nations resolutions? If the Secretary-General has doubts about it, the burden of proof is certainly on the Government to say how they think that the regular, nightly, massive unparalleled bombing, described by my hon. Friend the Member for Coventry, South-East (Mr. Nellist) as 20 times nighly what Coventry received during the blitz, is consistent with UN resolutions.
The report goes on:
But he"—
that is, Mr. Perez de Cuellar—
did express his distress that the UN is now associated with loss of human life caused by the war. 'This war is not a classic United Nations war in the sense that there is no United Nations control of the operations, no United Nations flag, [blue] helmets, or any engagement of the military staff committee', he said.
'What we know about the war, which I prefer to call hostilities, is what we hear from the three members of the Security Council which are involved—Britain, France and the United States—which every two or three days report to the Council, after the actions have taken place.'
This is different from Korea. I was not in Korea, but I did my national service at the time of Korea as tank crew in the Rhine Army. Many of those with whom I trained went to the King's Royal Irish Hussars and were shot up in Korea. I have a clear memory that it was all about the United Nations; it was certainly drummed into us that it was about the United Nations. The position in the Gulf in 1991 is different.
Mr. Doyle's report of Mr. Perez de Cuellar's comments continues:
'The Council, which has authorised all this, [is informed] only after the military actions have taken place. As I am not a military expert I cannot evaluate how necessary are the military actions taking place now,' he added.
He was concerned most about the loss of human life, he said, 'because as Secretary-General of the United Nations I consider myself head of an organisation which is first of all a peaceful organisation and secondly a humanitarian organisation.
That has to be explained, because the Secretary-General is saying that he disapproves—no other interpretation is possible from his statement—of the action which is being taken in the name of the United Nations of which he is the titular head.

Mr. Bob Cryer: I am following my hon. Friend's speech with great interest. Does he not agree


that those people who claim that the action is to sustain the United Nations are wrong, because the war itself represents a failure of the United Nations? The United Nations is an international body, designed, instituted and committed by charter to resolve conflict by peaceful means, not by war.

Mr. Dalyell: I agree not only politely but from the depth of my heart with the sentiment that my hon. Friend expresses. Emotionally and otherwise, I deeply agree with the point that he has put, extremely succinctly.
Mr. Doyle's report goes on:
While making a final appeal to Saddam Hussein to pull out of Kuwait 24 hours before the beginning of hostilities, Mr. Perez de Cuellar said that people on both sides did not want war.
Signalling once again his displeasure with the turn of events, Mr. Perez de Cuellar, who is 71, said that even if asked by the Security Council to stay on as Secretary-General he would refuse to do so.
Last week Tariq Aziz, Iraq's Foreign Minister, launched a bitter attack on Mr. Perez de Cuellar accusing him of remaining silent while the allied forces targeted civilians.
So it goes on. Hon. Members can read the rest of the report for themselves. I simply ask the question: if that report or anything like it is true, what is Her Majesty's Government's view of the position of the Secretary-General?
I return to the point raised by my hon. Friend the Member for Bradford, South (Mr. Cryer). I want to read to the House a moving letter, pertinent to the point, from a friend of mine, Howard Kensett, of Eastbourne in Sussex. I have known him as a United Nations stalwart and enthusiast for many years, ever since he invited me to meetings in Sussex on United Nations ecologically related subjects. He says:
The Gulf War is a blasphemy against the spirit and ideals set out in the United Nations Charter 45 years ago. The world appears to have learnt nothing.
The inspiring preamble to the charter begins: 'We the peoples of the United Nations, determined to save succeeding generations from the scourge of war, which twice in our lifetime has brought untold sorrow to mankind.'.
Mr. Kensett continued:
As an enthusiastic member of the UN Association for over 30 years, I have been numbed by what has happened in the name of the only world-wide organisation to encompass so much of the world's concern for mankind. The Security Council, formed to resolve conflicts, has compounded the situation by permitting no negotiation or diplomacy except an ultimatum and deadline which offered no face-saving alternative. The Secretary General was given no specific role to play, and has complained that he only knew the war had started one and a half after zero.
In September I attended, as a delegate of the Eastbourne branch of the UN Association, a peace messengers' conference at the UN in New York, where we were told that the Voluntary Trust Fund for the Promotion of Peace stood at $22,000. I said that this was a disgrace.
Since then I have written to Mr. Major, Mr. Kinnock, and the Liberal Democrats. Mr. Hurd replied that 'the United Kingdom makes no contribution to the fund: we doubt its effectiveness and can make better use of its resources elsewhere. We do not intend to sponsor British delegates to future UN peace messengers for the same reason.' No money for peace, but billions—nay trillions, for war—what a comment on our civilisation.
Mr. Kensett speaks for many. If the Minister or I—or any other hon. Member—were a poor Egyptian or Arab peasant and saw that money being given to the United States and the United Kingdom by the Emirates, Kuwait

or Saudi Arabia for war, we would begin to wonder why some of it did not come in our direction for economic development.
Page 2 of today's edition of The Guardian features a long article entitled "When UN resolutions met Iraqi resolve". It is, allegedly, a statement by the United Nations Secretary-General to the Security Council on 14 January 1991. Will the Minister comment on the following passages? If he wishes to give me a considered comment in writing, I shall make no fuss. The article states:
Underlining a theme that had been emphasised during my meeting the previous evening with Foreign Minister Tang Aziz, the President said that it would not be possible in a single meeting to find 'ready solutions to such a complicated situation'. He noted that whereas resolution 598, which Iraq had accepted, set out a comprehensive approach to the issues addressed therein, the Security Council had not, regrettably, adopted a comprehensive approach in dealing with the present crisis.
Does that represent the facts? If so, it means that the criteria laid down by St. Augustine and St. Thomas Aquinas for a just war—that everything should be done to avoid it—have simply not been fulfilled.
The article continues:
He pointed out that although Iraq had never accepted resolution 660, it had agreed, in the early days of the crisis, to attend a mini-summit in Jeddah and had begun to withdraw its troops from Kuwait. But those efforts, which he stated were aimed at achieving 'an Arab solution', were undermined by the introduction of foreign forces into the region, which heightened the threat posed to Iraq.
Criticising what he called 'precipitous' actions by the Security Council, he stated that Iraq had been tried in absentia and his Foreign Minister had been denied the facilities he needed to be able to present his case. Further, he stated that on earlier occasions when the Council had called for the withdrawal of troops, this had been accompanied by a call for negotiations between the parties; withdrawal had not been set as a precondition for such negotiations.
Moreover, he cited examples of Israeli occupation and annexation, noting that Israel had never been subjected to sanctions or outside military intervention as a means of ensuring compliance with Security Council resolutions.
I should like the Government to comment on that.
The House will forgive me for being personal. I am not an Arabic speaker, but both my mother and my father were fluent Arabic speakers and I was brought up in the belief that one had to be patient with Arabs. The Texan oil executives, Mr. Baker and Mr. Bush, seem to have been extremely aggressive and impatient in all their dealings. I want to know whether all that is printed in The Guardian is true. Either it is untrue, in which case it should be refuted, or it is true, in which case a great many questions have to be asked about the British Government's knowledge of the United Nations activities.
The quote continues:
On two separate occasions during our meeting, the President called on me to use my good offices, saying that if the other parties were to permit me to play a role in search of a solution, Iraq would facilitate my task and co-operate with me. In response to my comment that this idea would be a non-starter if the position of Iraq was irreversible on the subject of withdrawal from Kuwait, the President reacted by saying that that was not what he meant. He reiterated that I should try to engage the views of the parties, including Iraq, in order to make proposals that could lead to a solution.
Is that or is that not true?
I quote now from extracts from the Iraqi transcript translated from the al-Dustour of Amman of 9 February. This is what is being said in the Arab world and this is what is believed in Jordan. A number of Jordanians have telephoned my hon. Friends and myself, including a


princess of Jordan, one of the ruling Hashemite family, who are exceedingly concerned about what has happened, for reasons that everyone knows. In Amman, it is published:
Pérez de Cuéllar …'Now I do not want to argue with you, Your Excellency … but you have been the cause of this achievement for the Palestinian cause' …
Saddam Hussein: … 'From the year 1963 to 1968 Iraq was ruled by two weak brothers, and during their rule the sheikhs of Kuwait marched into the territory once again from Mitla to here, and then during the war with Iran they expanded again and exploited oil fields knowing from the very start that they were within the pre-August 2 1990 Iraq'".
That ties up with something that the right hon. Member for Old Bexley and Sidcup (Mr. Heath) has been saying —to which borders does one withdraw?
I quote again:
Pérez de Cuéllar: 'If you have this good case, you can go to the International Court of Justice.'
Saddam: 'We have said, and we still reiterate, that we desire peace and we are ready to bear our responsibilities as part of the international family of the UN, but are others ready to shoulder their responsibilities on the same grounds? Are they ready to respect international legitimacy and international law on the Middle East problem according to its background and to do justice to each issue?
'Notice what the American President said, that he speaks of formalties and does not touch on substantial issues which concern us as oppressed nations. He talks about the possibility of the withdrawal of ground forces after the crisis is over and does not mention anything about the withdrawal of naval and air forces.
Pérez de Cuéllar: 'These are not my resolutions. They are the resolutions of the Security Council.'
Saddam: 'These are American resolutions … it is the era of America. What America wants today is what happens, and not what the Security Council wants.'
Pérez de Cuéllar: 'I support you as far as the issue concerns me.'
Did the Secretary-General of the United Nations actually say:
I support you as far as the issue concerns me"?
Whether that is true or untrue, the House of Commons should know.
The interview continued in this way:
Saddam: 'Let us go back to the law and how a member of this family'"—
he means the United Nations—
is converted into the accused without listening to his defence.
You are the Secretary-General of the United Nations and despite this you have not been able to make it possible for the Iraqi Foreign Minister's aeroplane to land in the United States so that he may attend and defend the Iraqi point of view.
Some of us have been unhappy for a long time about the United Nations being physically in the United States. There is now a case for moving it elsewhere.
Perez de Cuellar's reply was:
I tried … and I said that this is a violation of the headquarters agreement with the United States.
Did the Secretary-General really say this? If he did, it raises serious issues.
My next subject is the Government's assessment of many of the members of the United Nations whose Governments, to put it mildly, are under the most acute pressure. It is said in the Arab world that, if Saddam Hussein can stand against the might of the world for 40 days, he must be right. The war probably looks rather

different from Cairo or from Damascus. I am told that we have achieved the near-impossible—bringing together the left in Egypt with the Muslim Brotherhood.
I am not making this up. Let me quote from that impeccable Labour newspaper, The Daily Telegraph. Alan Philps, of the foreign staff, wrote this:
In non-combatant countries, the Saddam cult is becoming a focus for grievances against the government.
In Bangladesh the campaign for the general election scheduled for Feb 27 has been dominated by Gulf war agitation.
My hon. Friend the Member for Bradford, West, who represents many Bangladeshis, knows that that is true. The article continues:
The Iraqi embassy in Dhaka, capital of Bangladesh, has claimed to have handed out 1,000 poster portraits of Saddam to marchers …
In Malaysia, where more than half the population is Muslim, police found a home-made bomb containing nails and broken glass planted outside the American Airlines office in Kuala Lumpur …
Tension is also rising in Nigeria, where there have been pro-Iraqi demonstrations in the Muslim north of the country, particularly the city of Kano and the town of Kaduna …
The smaller Muslim nations of Africa—Niger, Senegal and Sierra Leone—which have sent token contingents to Saudi Arabia, now find themselves open to accusations of being bribed by the Saudis.
I was chosen by Mr. Speaker to lead a parliamentary delegation to Zaire because of rain forest interests—hon. Friends of the Minister were members of the delegation—where we met the Zaire Foreign Minister, who was full of a meeting he had had with James Baker three days before. I asked him why Zaire was so definitely siding with the Americans. It was quite clear to all of us that it had nothing whatsoever to do with a judgment on the rights or wrongs of the situation in the middle east. It was all about Zaire's perception of obliging the Americans, so that a ban on aid to Zaire would be lifted—a ban which had been imposed because of that country's appalling human rights record. In a sense, that is corruption of the United Nations Security Council, and the same story could be told about the Ivory Coast vote in the United Nations Security Council.

Mr. Dennis Skinner: This American-led war has been based upon mercenary and corrupt actions from the beginning. America did not pay its subs to the United Nations—it owed $135 million—until the day that it wanted a resolution passed about the 15 January start date for the war. The United States also bailed out Egypt, to the tune of $2·5 million, writing off its debts, and told Yemen that, if it voted with America, it would get other aid. The United States got money from Saudi Arabia and laundered it to Russia, so that the United States would keep its mouth shut while Russia did what it liked in Lithuania. The United States has been trying to cadge money from Germany and Japan, the two countries which supposedly lost the war in 1945. That tells us something about wars—the winners are not always winners for ever.

Mr. Dalyell: I must candidly tell the Minister that, when I first head my hon. Friend the Member for Bolsover (Mr. Skinner) shout across the House that the war was "mercenary", I thought that he had gone over the top. After the past weekend I believe that, as so often before, my hon. Friend's insights were spot on. At the weekend, I said to my wife, "Dennis Skinner was right after all." Having thought that he was exaggerating, even I have now


come to the conclusion that the mercenary issue is very serious, but I shall not pursue it tonight, because I know that some of my hon. Friends wish to speak.
I am very worried about Tuwaitha, the nuclear facility in Iraq. For 24 years, I have been a weekly columnist of the New Scientist and I do not throw scientific facts around carelessly. As far as I know, it has never been satisfactorily explained what happens when a nuclear facility is bombed. I have always believed that, if one bombed nuclear reactors or certain types of nuclear research establishments, some sort of radiation would result.
I am told that no one in the west knows for certain what has happened in Iraq. There has been no monitoring. How do we know? I am not saying that this has happened, but how do we know that the most appalling Chernobyl-like effects have not resulted from the bombing of those nuclear facilities? People who drop bombs on nuclear facilities had better be clear what they are doing.
I am also worried about the bombing of Samarra, Kerbala and Najaf. I know perfectly well that Saddam Hussein probably put his chemical factories near to Samarra on purpose, and that there may well be missile boosting equipment near Najaf. However, they are holy places, and there is said to have been destruction.
I wrote to the Foreign Secretary about the damage and he replied that the Iraqis might well say that there had been damage when there was none. However, we have now seen pictures, apparently of Najaf—that has not been denied —showing considerable damage.
What is the Government's assessment of the effect on the Shi'ites? I shall leave any related matters pertaining to the Hajj to my hon. Friend the Member for Bradford, West, who knows more about them than I do; but there is, I think, considerable concern about the holy places, and also about Babylon and Ur of the Chaldees. I have asked questions about that. If the Minister doubts what I have said, he should consider what he, as an art lover, would say if Durham, Stonehenge, Salisbury or Wells were destroyed by bombing. What would that do to the British?
Hon. Members may say that I am confining my examples to the Muslim world. I could choose the third world, but I can also choose our West German colleagues in the Social Democratic party. With, presumably, his party's authority, Karsten Voigt, a member of the Bundestag and foreign affairs spokesman for the SPD, has said:
In the present situation, the SPD calls upon all responsible parties to cease hostilities in order to recreate room for a political solution.
I feel no embarrassment about calling for a ceasefire, at least to give space for discussion. There may be military disadvantages, but there do not seem to many of us to be any military advantages in the current inhuman bombing.
It is not just the inhuman bombing, however. On 5 December, I asked General Colin Powell—upstairs, in Committee Room 14—about his view of the much-repeated ecological figures from the King of Jordan. Part of his reply was, "Well, they will set fire to the trenches. We know from our satellites that they are pouring in oil which can be ignited, using artesian methods. My tanks will have to go through canalised fire."
I take no joy in this, but what I predicted in the first part of my Consolidated Fund debate on 19 December has come true. As can be seen in column 403 of Hansard, I specifically drew attention to the awful oil slicks that are now threatening the Bahrainis, and also threatening the

coral atolls that produce the larvae to feed the fish that provide a permanent supply of food for the people living around the Gulf. Let me ask—in brackets, as it were—what is happening to Qaruh and Umm A1 Maradim, the coral atolls. The ecological disaster is simply enormous.
I may have spoken for longer than I should have, for some of my hon. Friends wish to speak as well. I beg the Minister, in these quiet circumstances, to try to provide answers to these urgent and extremely worrying questions.

Mrs. Maria Fyfe: I congratulate my hon. Friend the Member for Linlithgow (Mr. Dalyell) on securing tonight's debate and on his persistence in the face of all the difficulties involved in continuing to present this issue to the House.
In all seriousness, and with no sense of irony, let me also congratulate Mr. Perez de Cuellar on his sheer frankness and honesty. When he admitted to the world at large that he had not even known that war had begun until an hour and a half after the commencement of hostilities, we had to admire his candour. In the world of politics, at almost every level, there is always a great temptation for people to pretend that they know what is going on when they do not, lest they are thought to be less knowledgeable and powerful than they are. That man's honesty will go into the history books: people in future will ask, "What on earth was going on in the Gulf war?"—the "United Nations war" which was nothing of the kind, as the facts that unroll day by day are proving. It is farcical that a war allegedly waged in the name of the United Nations has been going on for three weeks, during which time the United Nations has not even met.
General Schwarzkopf, in his fairly frequent press interviews, has referred to his political masters in the United States. He has never referred to what the United Nations might have to say about the war. Well down a lengthy article in the Evening Standard, General Schwarzkopf was asked whether it was possible that, if Saddam Hussein used chemical weapons, the west would respond with nuclear weapons. He replied that there had been no consultation with the Allies. He did not even mention the United Nations. He said that President Bush would not be able to rule anything out. I do not know whether he intended to frighten the Iraqis, but he certainly frightened me.
The United Nations is certainly not in charge of this war. Various developments are unfolding. I ask the Government not merely to answer my questions but to take action on them. One arises out of a letter in today's Glasgow Herald. It was written by Canon Kenyon Wright, a man who has won a great deal of respect in Scotland, for various reasons. He mentions a letter that he had received from Church relief workers in Jordan. They told him that children in Jordan need baby milk powder but that they are not getting it. Three cargoes of baby milk powder had failed to reach those infants in Jordan because the American forces are not letting them through.
The writer of the letter to Canon Wright said that that is illegal. Due to the sheer confusion of war and battle, mistakes can be made. I hope the Government will take up that matter with their United States colleagues and get them to allow the supplies of baby milk powder to reach the infants in Jordan. We must ensure that the sad effects


and casualties of war are reduced as far as possible. When people are so gung-ho that they start to think in Star and Sun headlines, they seem to forget about human needs.
I wonder also whether the Government will take up a question that I understand American congressmen have taken up with their Government. We have not heard a cheep about it in the House of Commons. To this day, the United States is funding people who are carrying out acts of terrorism in E1 Salvador. Many United States senators and congressmen have said that they can hardly go about proclaiming that they care about human rights in Kuwait when acts of terrorism are being carried out against the people of E1 Salvador. They have at least the honesty and goodness to recognise the anomaly. Some members of the United States Government have responded to those criticisms, but I have yet to hear a cheep from any member of this Government about that. Are they not interested in human rights in central America?
We ought to think seriously about trying to find a way out of the war. There is no point in saying that we are right and that history will prove that we are right. We must endeavour to resolve the conflict as well as possible. The United Nations ought to keep on meeting until a way is found to resolve the conflict. We ought to be trying to find some way, under United Nations authority, of organising a ceasefire under conditions that all concerned find acceptable. The United Nations should keep on meeting until a solution is worked out. The alternative is for everyone to sit back and let the war rip. Death, casualties and carnage will then go on and on until someone is declared a winner. In the name of common sense, would it not be preferable to discuss continuously in the United Nations the issues that concern the warring nations, in an effort to resolve the conflict?
Arrangements ought to be put in hand for an international conference—a conference involving not just the nations concerned but the peoples concerned, such as the Kurds and the Palestinians—to make sure that at the end of this episode some kind of settlement will be worked out. We need a settlement that will not merely stop the fighting but will achieve lasting justice in the middle east. If we simply allow the war to continue, and a victor to emerge, we shall end up with the conditions to inspire another war in the future, just as the second world war followed the first.
I hope that the Government will listen to what some newspapers are pleased to call the peacemongers. I regard those people as the ones who are actually thinking about finding constructive ways out of the dreadful mess into which the Government have got this country.

Mr. Max Madden: The whole House is once again greatly indebted to my hon. Friend the Member for Linlithgow (Mr. Dalyell), who initiated this important debate. This is the 27th day of the Gulf war. For every minute of those 27 days, there has been a bombing raid on Iraq. It has become very clear indeed, as each of those days has gone by, that this war has very little to do with freedom or democracy, but a great deal to do with America's determination to defend its oil interests and its ambition to extend its political influence in the region—political influence, so aptly described by the right hon.

Member for Old Bexley and Sidcup (Mr. Heath) as the new imperialism. It is indeed the new imperialism that we have seen so graphically demonstrated in the Gulf during the last 27 days.
It has been much more difficult to detect the underlying reasons for the turmoil that has gripped the Gulf—indeed, the whole of the middle east—in recent years. Clearly, those reasons are the legitimate struggle of the Palestinian people for a homeland and for independence, and the recognition by millions upon millions of poor Arabs that, in many Arab countries, the wealth deriving from oil is very unequally distributed. It is important to note that tonight, as during the past 27 days, British forces are seeking to defend one feudal family in Saudi Arabia and are fighting to restore another to Kuwait. If we believe in freedom and democracy, we must commit ourselves to ensuring that freedom and democracy will come to those Gulf countries one day.
Over the past 27 days we have been told that this war is approved, even sponsored, by the United Nations. Again it is becoming clearer and clearer that America hijacked the United Nations, that this war is American-inspired, American-led and American-dominated. My hon. Friend the Member for Linlithgow referred to leaked documents that reveal the extent to which, before 15 January, Perez de Cuellar and the United Nations were marginalised and manipulated. It is very important to recall that, as my hon. Friend has mentioned, it was hours after the attack on Iraq had taken place that the United Nations Secretary-General was informed of it. [Interruption.]
I do not know why the Minister is getting so annoyed. Could it be because this is the first debate on the Gulf and the United Nations initiated by my hon. Friend? The consensus between the Government and the official Opposition amounts to a conspiracy of silence to ensure that the House will not have an opportunity to speak out in the names of the 10 million or 11 million British citizens who are totally opposed to this war. Could it be that the Minister is upset because he is required, at the end of this debate, to come to the Dispatch Box and defend the war—defend it in the name of the House of Commons, which during the past 27 days has been denied any genuine opportunity to debate it?
In particular, I hope that the Minister will comment on the war aims of Her Majesty's Government, remembering that we are embroiled in this venture on the coat-tails of the new imperialism that the United States of America seems determined to introduce in the Gulf region.
We are worried about the war aims, which seem to be confused and contradictory. The Secretary of State for Defence said some time ago that this war would be short, sharp and quick. Yet 27 days later, he said on BBC Radio:
If Saddam and his forces merely withdraw to the border and we did see the liberation of Kuwait, but all the Iraqi guns and all the military machines were left on the other side of the border merely to repeat the exercise as soon as the allies went away,. that would simply not see the achievement of that resolution. I think people understand that it has to be right after all the effort, all the cost and all the pain that we've been involved in. We can't leave it half finished with a continuing menace continuing to threaten other states in the area.
Those are the war aims spelled out by the Secretary of State for Defence on 27 January. He repeated them precisely two days later, during Defence Question Time. Following that, the Prime Minister, when asked, said that


our war aims were entirely in line with the United Nations resolution, and he uttered no word of repudiation of what the Secretary of State for Defence had said.
We have heard some different war aims from the Foreign Secretary. His character is gentler and more civilised than that of the Secretary of State for Defence, and his war aims are significantly different. It is not without significance that Labour's shadow Foreign Secretary prefers the war aims of the Foreign Secretary.
Let there be no misunderstanding that what is happening is the destruction of Iraq. As my hon. Friend the Member for Linlithgow said, power stations are being obliterated, as are water supplies and all the needs of everyday life. Imagine what will happen in a few weeks, in the heat of the summer in temperatures of 100 deg or 120 deg F. Think of the illness and disease that will sweep Iraq at that time.
We should think also of how much Arab opinion is already alienated from America, Britain and the other states in the coalition. We all know that the coalition is America and, in a secondary way, Britain. We should think how difficult it will be for Arab states inside and outside the coalition to maintain their stability because of the alienation that grows deeper every day that the war continues.
In my view, now is the time for the United Nations to exert itself. The Security Council should have been in permanent session since the start of the war. It should have been picking up all the initiatives that have been made by Iran, India, the non-aligned nations, the Maghreb countries and Russia. All those initiatives have been taken in the past few days in an effort to achieve peace. We need a ceasefire and a negotiated settlement. We all know En our hearts that, if that peace is to be real and genuine and to lead to peace and stability in the Gulf region, it has to be worked out by Arabs. It cannot be imposed by external forces—and most of all, it cannot be imposed by the new imperialists.

Mr. Harry Barnes: Words have lost their meaning, and values and ideas have been stood on their head by the operation of the war. Those of us who favour bringing British troops home are said not to support the troops, when, in reality, we are the people who wish to save their lives. Those of us who have all along stood by the principles for which the United Nations stands are said to be anti-United Nations because we have voted against the Government, who claim that resolution 678 is a mandate from the United Nations to take the action that they are taking in the Gulf. I object strongly to being called anti-United Nations.
Clause IV(7) of the Labour party constitution spells out our commitment to international principles and stands by the United Nations. It states that its objectives are
to co-operate with the labour and socialist organisation in other countries and to support the United Nations Organisation and its various agencies and other international organisations for the promotion of peace, the adjustment and settlement of international disputes by conciliation or judicial arbitration, the establishment and defence of human rights, and the improvement of the social and economic standards and conditions of work of the people of the world.
There is no way in which the action taken by the allied coalition forces could be said to be in keeping with any of

those principles. I do not believe that allied forces are acting in conformity with the resolutions passed by the United Nations.
Resolution 678 states that in certain circumstances all necessary means can be used. We are using wholly unnecessary and counter-productive means in the present circumstances. Resolution 678 also endorses all the previous United Nations resolutions on the Gulf crisis, including resolution 666, which calls for foodstuffs and medical supplies to be made available in Iraq and Kuwait in certain circumstances. Those circumstances were envisaged to be the application of the sanctions. Sanctions still apply, but in the context of a massive bombardment of the Iraqi people. Those circumstances are endorsed by resolution 678.
I shall quote from and explain the early-day motion on United Nations resolution 666 which I tabled today. It states:
That this House notes that the much-quoted Resolution 678 of the United Nations reaffirms all previous United Nations Resolutions on the Gulf crisis, including Resolution 666.
Conservative Members may say, "resolution 660", but there are a number of resolutions, and resolution 666 happens to be one of them. The early-day motion
calls for particular attention to 'be paid to such categories of persons who might suffer specially, such as the children under 15 years of age, expectant mothers, maternity cases, the sick and the elderly' and recognises 'that circumstances may arise in which it will be necessary for foodstuffs to be supplied to the civilian population in Iraq or Kuwait in order to relieve human suffering', plus medical supplies; and also notes that Resolution 678 is ambiguous about the means it sanctions to ensure that Iraqi Armed Forces withdraw from Kuwait, but recognises that this element of the Resolution has been interpreted by the governments forming the coalition of Allied Forces to justify a continuous massive bombing raid on Iraq and Kuwait and that the situation has thereby been created whereby Resolution 666 should now engage world attention, and that the supply of foodstuffs and medical supplies to the categories of people mentioned above can only meaningfully be undertaken given an end, or at least a pause, to mass bombing.
Presumably, resolution 666 is as significant in terms of the Gulf crisis as resolution 678. We should now be forced to find a means of pursuing resolution 666 and looking after the groups of people who have been sorely treated in the massive bombing throughout Iraq—especially in areas in the south such as Basra, of which we hear little, but where ports, docks, marshalling yards and railway stations are intimately linked to residential areas, schools and hospitals and where the destruction must be phenomenal. That should be a matter of the greatest concern to us. We should be finding out what is happening and taking steps to overcome the problems.
Fortunately, the United Nations is doing something at least in that direction. The United Nations Children's Fund and the World Health Organisation have set up a mission to send emergency medical supplies to children and mothers in Iraq. It will start with Baghdad, but I hope that, when its members get there and discover what the position is, they will try to find out what is going on in other areas of Iraq, including Basra—an area in which. I have a specific interest.
Another idea that has been turned on its head is the position that people such as I have adopted towards the British troops. I served for two years in Basra and I hope that I therefore have some sympathy for the British troops and an understanding of their circumstances, as well as some concern for the Iraqi citizens—the people with whom


I mixed and with whom I worked while I was serving with an RAF movements unit there. I worked closely with people in the docks and railways and in shipping. It is those people and their children who have been severely hit by the action.

Mrs. Alice Mahon: My hon. Friend mentioned his position regarding the troops in the Gulf. I wrote to every one of the troops who were mentioned in my local evening paper—which gave an address and asked people to write—offering my support and pledging that we were trying to find a peaceful solution. I am now receiving letters back from those troops, every single one of whom supports our position. They are wonderful letters and I promise to let my hon. Friend see them. He will then be as convinced as I am that we are absolutely right to try to spare them a terrible fate.

Mr. Barnes: Every hon. Member must have at least 50 people from his constituency among the troops in the Gulf; in my case, it is probably more. I object to the nonsense that is appearing in the Daily Star to the effect that we are anti-troops. The troops and their parents and relatives in this country may be in need of all kinds of assistance and may need their Member of Parliament to deal with officialdom on their behalf. They may be deterred from seeking our advice by the nonsense that is appearing in the mass media. That is a dangerous state of affairs. We need to take action and to say that we are their representatives and that British troops and their relatives can turn to us perhaps more readily than they can turn to those hon. Members who regard the troops merely as cannon fodder and who are not interested in their lives and well-being.
It is imperative that we start to push the United Nations to try to overcome the problems and to move towards periods of ceasefire, so that we can put a stop to this nonsense.

Mr. Bob Cryer: Hon. Members such as those present tonight who ask critical questions on the Gulf war do not intend any reflection whatever on our forces in the Gulf. It is a foul and wicked lie for anyone to use that argument against those of us who talk about peace and a ceasefire so that the men and women in the forces do not have to face the possibility of death and mutilation for an instant longer than is made necessary by the force of the prevailing circumstances.
The Congress of the United States dealt with the Gulf war far and away more openly and better than did the mother of Parliaments. There was an agreement and a conspiracy in the House to have a joint resolution of the House. No alternative vote or voice was permitted by joint consensus. It is amazing that, in the debate on 21 January, certain hon. Members were called, when the overwhelming body of opinion among Opposition Members who wanted to speak was against the war. That expression of opinion was denied by that self-same shabby conspiracy. There is no question about that in my mind.
The supporters of this dreadful war talk about supporting the authority of the United Nations. But the authority of the United Nations has been weakened. The United Nations was established to resolve international

conflicts by peaceful means. If a country goes to war with the authority of the United Nations, which the Americans claim to have, that is a failure. But we know that to declare war is an important and serious decision. That decision was not made under the required terms of concurrence of all the parties, because China abstained. Technically, it meant that the decision was not in conformity with the United Nations charter. It was an illegality—the sort of argument that could be pored over by international lawyers and courts. But the illegality was shoved to one side and we went to this dreadful war.
Of course, the United States bribed certain nations, such as the Soviet Union, to stay out of the war and others, such as Egypt, to stay in the war. The idea that this is a war of principle is a mischievous deception on our nation and the rest of the world. What is the war for? Of course we oppose the invasion of Kuwait, but when we liberate Kuwait shall we liberate the working men and women of Kuwait? Of course not. We shall restore a feudal autocracy which, shortly before the dispute began suspended Parliament and suppressed student expression of discontent with excessive brutality and zeal.
The Government talk about the authority of the United Nations. The Minister can tell us about it tonight. He will have half an hour, which is as much as a Minister has in a full day's debate. He will have until half-past ten. If the Government care about the United Nations, do they intend to honour the United Nations nuclear nonproliferation treaty to which Iraq is a signatory and which Iraq has honoured? The Minister knows that maintaining Polaris—thank God Holy Loch is to be closed—and purchasing Trident is in clear breach of the United Nations treaty. If the Government are willing to support the United Nations over Kuwait, they should support it on other matters. I am talking about double standards. It is convenient to support the United Nations in the Gulf, but it is not convenient to support the United Nations in its bid to get rid of nuclear weapons. However, that should be done.
There will be no winners from the war. Millions of people in the middle east will feel nothing but contempt and hatred for the United States, and—alack, alas—for the United Kingdom, which has a special relationship with the United States. That special relationship means that we do the bidding of the United States. We have been sucked unnecessarily into this war and we shall face vitriol and hatred from many millions of people throughout the Muslim world. I do not say that as a person who accepts the view of the Muslim world uncritically.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Question again proposed, That this House do now adjourn.—[Mr. Greg Knight.]

Mr. Cryer: I do not accept the views of the Muslim world uncritically, as those who know my record on the publication of "The Satanic Verses" and the attack on Salman Rushdie will testify. However, Muslims have a right to their religion, their holy places, their cohesion and commonality on the planet. This war will divide nations, not unite them. It will deepen hatreds and divisions between peoples of the world, and that can only be to our harm.
The General Assembly, not just the Security Council, of the United Nations must be invoked so that it can once again wrest control of the terrible conflict from the hands


of the United States and put it back where it belongs. When that happens, the United Nations should also issue a clear commitment to bring the conflict to an end and to produce satisfactory peace terms.

Mr. Dennis Skinner: I am pleased that my hon. Friend the Member for Linlithgow (Mr. Dalyell) got the Adjournment debate tonight, and I also compliment those people who managed to collapse the previous debates to allow more than one or two hon. Members to speak in this one. No doubt the Tory Whips will have their knuckles rapped for allowing the debate to collapse—

Mr. Timothy Kirkhope: The hon. Gentleman has got it wrong.

Mr. Skinner: The hon. Gentleman, who is not supposed to speak, tells me that I have got it wrong, but the truth is that the Tory Whips allowed the business to collapse and that has enabled—

Mr. Greg Knight (Lords Commissioner to the Treasury): Very good.

Mr. Skinner: This is not the supper club—this is supposed to be democracy. This is where we speak in the open, talk to one another, in the hope that we transmit some information to the world outside so that those opinion polls that have been twisted can reflect more fairly the views not only of those in the House, but the people outside.
Tomorrow, the United Nations should have its session in public. Tomorrow's meeting should not be secret, but I have no doubt that that suits the Americans who are leading the war and those who are tagging along such as the new Prime Minister, the Secretary of State for Defence and all the rest of them. They are little more than American poodles, because nearly everyone in the street knows what this war is about. It is not about democracy for, if it was, what the hell are we doing having British troops risking their lives on the desert sand while the Kuwaiti royal family are in the gambling dens and the casinos, gallivanting around the world and living in hotels in Cairo? According to newspapers, those hotels are costing $3,000 a month. They are lapping it up and one of the Kuwaitis in those hotels said, "Well, Kuwait is not really a country, it is a country club." They are watching the war on television. While our people are risking their lives, they are having a great time. Those people, 25 of them with the same surname, will be back in Parliament in Kuwait when it is free.
The war is not about democracy, or principle. If it were, why would the British Prime Minister be racing about with others from the Tory Government begging money from anyone they meet in the street? If one were fighting a war about principle, one would not be money grubbing. This is a mercenary war. If money of that scale had been asked for 10 or 15 years ago for South Africa, everyone would have said that that was a mercenary war and "Mad Mike" Hoare would have been running it.
This war is all about America. It has seen that Russia has problems of its own with nationalism and economic troubles. It knows that it has a chance to move into a part of the world where it has never had an opportunity to be since the end of the second world war. The power vacuum in the middle east enabled the United States to move in

while Russia has troubles of its own. It launders money from Saudi Arabia and says to Russia, "Here is $4 billion to keep your mouth shut," and to Egypt, "Here is $3·5 billion to write off your third-world debts." It says, "Anybody else want money?" It begs off Kuwait and Saudi Arabia and launders the money to different countries. Then it has the cheek to tell us that it is all about a great principle. It is not about a great principle at all.
Of course, there is another factor. When elected President of the United States, George Bush was regarded as a wimp. Everybody knew him to be a wimp. He wanted to be Rambo; he wanted to be macho. This enables him to have an opportunity to change his image in the United States in order to get re-elected. In the process, thousands, perhaps hundreds of thousands, will be slaughtered, but it will not be Bush, it will not be Stormin' Norman, it will not be Colin Powell. It will not be all the armchair generals who tell us about the war. It will not be the Tory MPs in the Government and the Cabinet. They will not lose their lives, they will not put on flak jackets as the Secretary of State for the Environment did once before. He was the man who did his national service but who bought himself out after a few months. They march through the Lobby saying, "We are prepared to send our troops to the battlefield in order to fight for Kuwait and hand it back to the royal family."
Then we see the bombs and read about the shells. We see all the Tornados going under. We count the cost—£21 million for a Tornado, £750,000 for a Tomahawk missile. When I see that, I say to myself that that is the peace dividend gone. We talked about the ending of the cold war and what we would do with the money. The Tories said that they would cut defence expenditure. The Liberals as usual said that they would cut defence expenditure. The Labour party said, "When in government we will cut defence expenditure." Everybody looked forward to more hospitals, more homes to get rid of cardboard city, and proper cold weather payments week in and week out without pensioners having to beg for them. Then we pick up the newpapers every day and see all those munitions being fired in Kuwait and in the desert. The peace dividend is being blasted into smithereens in the Persian Gulf.
We are supposed to accept that. I have not been sent to Parliament to send people to die for these feudal dynasties in the middle east. At the end of it, what happens? People say that war is quick. Sometimes it ain't. The trouble is that some people in this building remember only the Falklands; that is all they remember. It was a short war. There were a few explosions here and there and a few hundred were killed, more Argentines than Britons. There were great celebrations at the dock side.
This might be a long war. If it is, there will be a lot more casualties and people will have different perspectives about it. The jingoism may change if it drags on through a long hot summer. What will happen? The views of people who said, "Let's get stuck in and get this finished," may change. Too many people think that sanctions would have lasted too long, but what about a war that lasts too long?
Of course, after a war people finish up victorious, but what does it do to a generation of young people? It gives them the impression that the way to resolve problems in the world is not by diplomacy, negotiation or the use of tact and skill, but by killing people. It will educate another generation into the belief that that is the way to do things. Yet people tell me that when it is all over we can have a


new world order—a new world order based upon killing, brutality and the massacre of innocent men, women and children out there in the middle east. I do not believe that.
That is why my hon. Friend the Member for Linlithgow was right to raise the matter. That is why it is important to study the views of other people. It is important to raise these issues. Much could be said about the war, but one thing is certain: everyone who sold arms to Saddam is as guilty as everyone else—the whole lot of them. If they did not sell the arms, they provided them with the machine tools to make them, and with all the equipment. Right up to the nether end, they were writing off Iraq's debts and increasing the Export Credits Guarantee Department's money to about £400 million. They did everything possible to build up that monster, Saddam Hussein.
Then they have the cheek to tell us that we cannot have the motion put forward by my hon. Friend the Member for Bradford, South (Mr. Cryer), to say that, although we support people who will lay down their lives in the desert, we prefer peace. The opposite to war is not appeasement —in our language, it is peace, and it is time that we gave it a chance.

Mr. Tony Banks: My speech will be exceedingly brief. Further to a comment made by my hon. Friend the Member for Bolsover (Mr. Skinner) about the supply of arms to Saddam Hussein, there is no doubt on either side of the House that Saddam Hussein must not be allowed to benefit from his occupation of Kuwait. That is unarguable. Saddam Hussein is an evil and wicked person. There are many such people in the world, but he qualifies as one of the worst.
However, Labour Members were telling the Government for many years just how evil that man was. We were telling them that he was evil when Ministers were going to Baghdad, were being pictured with Saddam Hussein, and were encouraging him to take up trade credits. Britain was at the Baghdad international trade fair. It is amazing that we are now being told that that man is a monster. We accept that, but why, when we were saying so, were we ignored or laughed at and then told cynically by Ministers, "Well, if we don't provide the technology, if we don't trade with him, someone else will"? We do not need to be lectured by the Government about how evil Saddam Hussein is.
My hon. Friend the Member for Bolsover mentioned arms. The current edition of Time magazine on the Gulf war sets out graphically the armaments available to Saddam Hussein. An American first lieutenant, Alan Leclerc—a US marine pilot who flies daily—used a poignant phrase when he said:
It angers me. Countries of the world need to be a little more discreet about whom they sell weapons to, and that includes us.
Those American, British and French pilots who have been risking their lives realise that they are facing weaponry that was provided by their own countries. The list of weapons is a list of shame.
The missiles were provided by the Soviet Union; France provided the Exocet missiles that are still there, perhaps poised, waiting to strike at our troops. The tanks were provided by the Soviet Union; the artillery—apparently some of the finest in the world—was provided by South

Africa. The aircraft were provided by France and the Soviet Union. Mines were provided by the Soviet Union, Taiwan, Italy and others. Brazil provided fire-controlled radars; Britain provided training and equipment; France provided point defence radars.
We were still training Iraqi troops in this country until a few months ago and now we are told that Saddam Hussein is a monster. When we said so, we were ignored. I do not like the Government's hypocrisy. They now accuse us of being appeasers or, as some of the gutter press suggest, traitors. We have been loyal to the British people from the beginning and have always wanted to ensure that no British military person should lose his life in this shabby war.
As for principles, President Bush would not know a principle if it were stuck on the end of an Exocet and smashed straight through his head. That great, principled politician ordered the invasion of Panama. We do not want to hear about principles but about peace, as my hon. Friend the Member for Bolsover said. We want to ensure that the United Nations is used to resolve those regional conflicts by peaceful means. Surely the new world order is that we talk peacefully and in a civilised fashion about how we reconcile our differences, not how we throw our young people against each other and see them killed and maimed.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): This has been a highly charged debate, and I recognise the feelings that have been expressed. I realise that some hon. Members have been kind enough to refrain from speaking in order to give me an opportunity to reply, and that is important in any democratic assembly. I was fearful earlier that I would not have an opportunity to state the Government's position.
Let me make one or two general points fundamentally clear at the outset. Our objectives and the objectives of the alliance, and our actions in the hostilities, are all conducted under the authority of United Nations Security Council resolutions. Hon. Members who have waxed strong and indignant have failed to recognise the import and meaning of resolution 678, which authorises the use of all necessary means to seek the objectives of resolution 660.
Hon. Members have argued that hostilities were not necessary; that hostilities should not have been indulged in. But if Saddam Hussein would not respect United Nations resolutions under the relentless bombing that his armed forces have undoubtedly suffered, under the relentless attack on his armed forces and their installations that he has undoubtedly suffered, how does any hon. Member imagine that he might have left Kuwait under the pressure of sanctions?
There are one or two matters which might have been mentioned amidst all the moral indignation and fervour expressed by Labour Members. The hon. Member for Bradford, South (Mr. Cryer) said that our objective was merely to restore a feudal autocracy. He made no mention of the size of the gigantic Iraqi war machine, which has been so amply demonstrated in recent weeks, or why he felt that that war machine had been assembled. No hon. Member mentioned the rape of Kuwait, Amnesty International's report, the enormous bloodshed that has


been caused to the people of Kuwait, the allegations that we have all heard about the incubators and the dreadful suffering that was caused to Kuwaiti citizens.
One further thing of which there has been no mention amidst all the moral indignation is the outrageous treatment of our 10 prisoners of war. Not one hon. Member suggested any indignation that those poor men should have been paraded in their state on television contrary to the Geneva convention. Not one person expressed any outrage or indignation at the fact that there has been no access to them, not even by the Red Cross, and no list has been provided of who they are or there whereabouts.

Ms. Mahon: Will the Minister give way on that point?

Mr. Lennox-Boyd: No, I shall not give way. This has been a long debate. Hon. Members have had an opportunity to speak, and I really must have an opportunity to reply.
The hon. Member for Linlithgow (Mr. Dalyell) mentioned one thing that I shall pick up, because it is of personal interest to me. He said that he was not an Arabic speaker but that his parents were. I am, in some way, an Arabic speaker. I believe that I am the only Arabic speaker in the House. When I hear all the expressions of outrage and feeling about Palestinians and Jordan, I would only say that I have been to Jordan on more occasions than I can count. I have lived there, and I honestly think that I know it fairly well and that I can claim as much knowledge of it as any other hon. Memer—or at least, I did once. I count many Jordanians and Palestinians as my friends.
Hon. Members will be aware that the Foreign Office is not without its Arabists. One of the impressions that I have gained over the few months that I have been in the Foreign Office is that, to a man, the Arabists recognise, albeit reluctantly and unhappily—as we all do, because we all regret war—that ultimately it was necessary that hostilities were used under the authority of the United Nations resolution 678. It could not be avoided.

Mr. Tony Benn: Will the hon. Gentleman give way?

Mr. Lennox-Boyd: No, I will not give way. I have only 10 minutes to reply to the debate; the right hon. Gentleman must respect that.
I have a few words to say about the resolutions of the Security Council. The first of the Council's resolutions—660—was adopted within hours of the invasion. There were no votes against and no abstentions. It condemned the invasion and called for immediate and unconditional Iraqi withdrawal.
The second resolution followed only four days later. Resolution 661 imposed comprehensive trade and financial sanctions on Iraq and occupied Kuwait. It also established a sanctions committee. Three days later, resolution 662 was adopted unanimously, declaring that Iraq's purported annexation of Kuwait was null and void.
The test of whether sanctions worked was whether they brought Saddam Hussein to change his policies and withdraw from Kuwait as the Security Council demanded. They did not. As my right hon. Friend the Foreign Secretary concluded on 15 January, sanctions would not achieve such a decisive rundown of Saddam Hussein's military machine that he would leave Kuwait. Meanwhile, five months had elapsed and his brutal occupation of

Kuwait continued. The atrocities committed by the Iraqi forces in Kuwait have been well documented by Amnesty International and others. Waiting longer for sanctions to work was therefore not an option.
I have to reiterate that it was the international community which decided that sanctions were not enough, when the Security Council adopted its resolution 678 on 29 November. To remind hon. Members, this authorised member states to use "all necessary means" to implement earlier relevant resolutions of the Council in the absence of Iraqi compliance by 15 January. Despite this 45-day pause of good will, Iraq ignored the deadline completely. Consequently, with the full authority of the United Nations, the allied coalition embarked on military operations against Iraq.
The Government's position is clear. Allied operations have been directed against Iraq's massive military machine sustaining the illegal occupation of Kuwait. Any such attacks, if necessary for the purposes specified in resolution 678, are fully within the authorisation granted by that resolution. It is absurd to suggest that these operations could be confined in a modern war to the geographical territory of Kuwait. That would not deal effectively with Iraqi aggression. We have made it amply clear that our objectives are to get Iraq out of Kuwait completely, to see the legitimate Kuwaiti Government restored, to uphold the authority of the United Nations, and to re-establish international peace and security in the area. This does not entail the destruction, occupation or dismemberment of Iraq. It is not for us to decide who governs Iraq.
The hon. Member for Linlithgow referred to the pounding of Baghdad. I think that he might have been intending to refer to the pounding of the Iraqi forces in Kuwait. It has been the clearest possible intention of all allied operations to avoid civilian casualties. We have also made it clear that we are doing everything possible to keep civilian casualties to a minimum, and to avoid damaging sites of religious and cultural significance. We have reported as much to the Security Council, in a series of reports since hostilities began. The military action will end as soon as the purposes laid down by the Security Council have been achieved.
The hon. Member for Linlithgow referred to Babylon, Ur of the Chaldees, Najaf and Kerbek. There is no evidence that those sites have been struck. I remind him that, had there been evidence, it would have been available in photographic form, and we should surely have seen it. Would he not consider contrasting that lack of evidence with the terror tactics deployed by the Iraqis in launching Scud missiles on innocent civilians and the risks to mosques and holy places occasioned by such indiscriminate attacks?
The 12 Security Council resolutions form a landmark in UN history. They have all been adopted with overwhelming majorities. They have been characterised by the closest co-operation between the five members of the Council.
I am very glad that we have had this debate, because it allows me, on behalf of the Government, to express our clear view of the importance of the United Nations in handling this major international crisis. Iraq has chosen, at every opportunity, to react to the UN action with invective in denying the authority of the Council—a sea change indeed from the time, during the Iran-Iraq war, when the Iraqis claimed to be its most fervent supporters.
The invective has been directed not only against the council but also against the UN Secretary-General. I am sure that the House will join me in paying tribute to Mr. Perez de Cuellar, who has time and again made every effort to act as a messenger and peace broker.
The hon. Member for Linlithgow called for a ceasefire, as have other hon. Members. Others have called for the Security Council or the UN Secretary-General now to call for a ceasefire or a pause in hostilities, to allow Saddam Hussein a chance to respond. But what evidence do we have that Saddam Hussein is prepared to listen? What evidence is there that he is now more prepared than before to heed the demands reflected in all these resolutions? The abuse of the Security Council and the Secretary-General in Tariq Aziz's two letters make it clear that nothing has changed. Saddam Hussein continues to thumb his nose at international opinion, international law and humanitarian obligations.
As my right hon. Friend the Prime Minister made clear on 20 January, we do not want the conflict to continue a day longer than necessary. We do not wish to risk the lives of our forces, if implementation of the Security Council resolutions can be achieved by peaceful means. But we do not favour a pause or a ceasefire. We had a pause for good will until 15 January.
Our forces are now engaged. We cannot agree to any suspension of hostilities which would allow Saddam Hussein to regroup and strengthen his position, simply in the hope that this might lead to negotiations. Hostilities cannot end—or pause—until we know that all Iraqi forces are out of Kuwait. The United Nations should not settle for less.

Mr. Tony Benn: When this debate is read in future, it will be seen to have been the beginning of the end of the United Nations, because of the use made of it by the American and British Governments. This Government left UNESCO because they did not agree with the UN. The Americans left UNESCO. The American and British Governments have brought the Security Council in, and now the most murderous bombing of innocent men, women and children in Iraq is being done in the name of the United Nations.
Tonight, the House has reflected more faithfully the concerns of decent people, who believe in the United Nations, than all the speeches made by the Conservative party since the crisis began. I warn the Minister that, if this is the way in which the Government aims to use the United Nations, we shall indeed fall back into the barbarism from which the UN was intended to rescue us.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.